Banco Santander Brasil SA
BOVESPA:SANB3
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Good morning and thank you for waiting. Welcome to the conference call to discuss Banco Santander (Brasil) S.A.'s results. Present here, Mr. Sergio Rial, CEO; Mr. Angel Santodomingo, CFO; and Mr. Gustavo Sechin, Head of Investor Relations. [Operator Instructions]
The live webcast of this call is available at Banco Santander's Investor Relations website at www.santander.com.br/ri, where the presentation result is also available for download. We would like to inform that the questions received via webcast will have answering priority. [Operator Instructions]
Before proceeding, we wish to clarify that forward-looking statements may be made during the conference call relating to the business outlook of Banco Santander (Brasil) operating and financial projections targets based on the beliefs and assumptions of the Executive Board as well on information currently available.
Such forward-looking statements are not a guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events and hence depend on circumstances that may or may not occur. Investors must be aware that general economic conditions, industry conditions and other operational factors may affect the future performance of Banco Santander (Brasil) and may cause actual results to substantially differ from those in the forward-looking statements.
I will now pass the word to Mr. Sergio Rial. Please, Mr. Rial, you may proceed.
Thank you very much. I would like to start by, again, thanking everyone. I would like to also give a welcome to Gustavo, who is our new Head of Investor Relations, joining us in this important call. And of course, our CFO, Angel, will then take this conversation further with all of you.
The reason why I'm here is to -- at least to try to provide some context for the news of my migration to the Board. A couple of thoughts and premises. One, I'm not leaving Santander as a group. I remain very much committed to both Santander Brasil, but also to Santander Group.
Second, succession has been really planned over the last 2 years. We had an extensive and well-thought process, very much linked with the local Board and the Group Board, primarily also due to the materiality of Brazil and South America for the whole group. We had an extensive research, both externally and internally, I started the process since the day I joined the company as the CEO. So there were a number of names on the list.
And then, I'm very glad that as the CEO, they're very much supported by the Board, which is the Board's prerogative at the end, the succession. I was able to actually indicate the person and the executive that I think will take Santander Brasil in a second phase.
Mario has been part of the team for the last 4 years, part of the ExCo. I have the opportunity to test, see, observe, challenge not only him, but also other potential names. And I'm very much convinced that on the back of his technical background, leadership style, commitment and an incredible unlimited curiosity, let alone that he's got more ambition than I do for the business overall, I think I'm going to be leaving the organization next year in very good hands.
We have a very clear process that until the end of this year, I am leading the organization. So there's absolutely no confusion whatsoever. And as from, I would say, probably more in November, we'll start what I would call more of a gradual handover of the keys. But the process is clear. He takes over, with Carlos Rey for South America, on January 1. And in the meantime, we still have a year to deliver, and we want to deliver the best year in the history of the company. And more importantly than this year, is to create the base for a phenomenal, solid 2022.
I think we have proven repeatedly that we are committed to profitable growth. I think we have proven repeatedly that despite regulatory changes, despite all the unknowns, we have been in a very humble manner because we always say, we don't know what the scenarios are going to be. The only thing that we know is that we've got to be prepared to any scenario. So I think the cultural component of Santander is very, very strong.
And I've been saying that from the beginning, perhaps if there is a legacy that I leave, it's this big word, which has become a bit of a cliche, that if there are certain aspects of Santander today are it's very clear cultural trades. And what would they be from our perspective? Speed, desire to grow and focus constantly where are the opportunities for growth. You will see that as Angel explains what has happened in areas like credit cards and other areas like the distribution channels.
Third, very committed to have constructive and difficult dialogue. We tend to deal with difficult issues in groups and committees. There is a high level of what I would call intellectual honesty, perhaps not as much as it should, but the culture permits people to actually disagree and provoke change.
The other component of the culture, autonomy. I believe in autonomy. I believe in business units. You're going to see a quarter where Getnet is no longer in the balance sheet. It was a business that was successfully incubated inside of Santander. We certainly bought the platform a number of years ago, and we will deliver one of the strongest performance of the business relative to some competitors and even to the macro and the pandemic scenario.
So the message to you all is we're going to have other chances and opportunities to explore the change, transition, potential risks. I want to make sure that you all at least hear directly from me that succession was planned. You actually plan your succession when you don't need to be succeeded. This reinforces the culture of being contrarian. Yes, we are contrarian. We tend to take sometimes not the obvious path, and it's -- this is exactly the best and strongest moment of the company over the last 10, 15 years. And that's exactly when you think and you should plan and put in place the right gradual succession.
Key messages? I remain in the group. Mario has been part of the group. I'm now going to be an Executive Chairman, but I will not be a Chairman of Committees. So I'll be present inside of the bank. I will certainly help management to continue on the strategy. I think I can reassure you that there's going to be a high degree of continuity, certainly not going to be the same.
Hopefully, it will be better, but certain elements of continuity being growth and elements of the culture. The culture will be certainly capped because Mario has been, together with the rest of the Executive Committee, been a very important part of this construct.
We are also adding Andrea Almeida, who was formerly the CFO of Petrobras and a long executive inside of Vale for many years. She's going to be bringing a phenomenal experience in key commodity spaces for the Executive Committee, especially in a world where ESG is going to become so important.
So to have someone not only with her financial acumen but also her views around ESG and how she experienced it from a mining and fossil fuel industry, will be really helpful for us to continue to position ourselves as a leading force in becoming and being an engine for economies of low carbon.
Last, I'd like to thank you all for following the story. I will remain, again, committed to the stock. My deferral remains committed in Santander Brasil stock. So I'm really pleased that I'm able to hand it over by the end of the year to a very high-quality person. You're going to have the chance to see him next year more in detail. In the meantime, we still have the year to deliver to shareholders. And hopefully, you will enjoy the conversation with our CFO and the numbers.
We're really proud to deliver a very strong second quarter. We started very strongly for third quarter and fourth quarter. You will see the best year of Santander in 2021. And Mario will do everything he can in an appropriate manner. And of course, within the right level of governance, he will absolutely exceed everything that Sergio has done with my present Executive Committee. With all of that, remember, succession happens when you don't need to be succeeded.
With that, I pass my word to Angel, our CFO. And please enjoy the call. I will disconnect. And of course, I will depend in what Angel and Gustavo then guide me, certainly happy to then organize the meeting with the sell side, with investors at the appropriate time during the month of August or in the early part of September. Once again, thank you very much. Angel, with you.
Okay. Thank you, Sergio. Good morning, everyone. Hope you are doing well. What I will do from now on is share with you the presentation of our results of our second Q results. And then we will open, as always, the session for Q&A.
So starting with the presentation in the first slide on Slide 4. The first idea is we show how -- Santander's integrated business system in Brazil, which serves over 50 million clients. Reaching thousands of customers who use our platforms on a day-to-day basis allows us to leverage business opportunities.
Our channels receive more than 500 million visits every month. The auto platform alone, for example, which includes WebMotors, Santander Auto and Santander Financiamentos, generates over 35 million monthly interactions. It's also worth noting the bank's initiatives and new businesses in open waters with platforms such as Sim, emDia or Toro, which will enable us to further accelerate the pace of customer acquisition and loyalty.
So in the next slide, you can see the high volume of active or potential customers passing through our channels, which provides us with good growth opportunities. This is a growth clearly trend. We offer a comprehensive range of service channels from which customers can select the type of service that best suits their needs, whether it's digital, remote, physical or external.
We currently have about 17.3 million -- a little bit more than 17 million customers who sell stuff through digital channels each month. This has allowed us to increase our sales by more than 2x over the last year while lowering execution costs.
In the remote channel, thanks to the new service model, we are already exceeding 300,000 sales per month and it's just the start. Similarly, the physical channel continues to see a high volume of people and clients, nonclients in our stores, as we call them, our agencies, with over 50% of those 15 million clients and nonclients per month being potential businesses.
We have also been expanding into strategic regions, the internal part of the country, that have shown a strong potential and fast for revenue growth. The external channel is comprised of banking correspondents in the bank's business verticals, such as Prospera, Olé Payroll, et cetera, which have been also experiencing steady growth and which I have presented during the past on how cheap and profitable they are.
In the next slide, I presented to you last quarter the different types of clients from the nonactive after 90 days to the largely linked ones. There are 2 important points to consider here. Do we grow that client base? And do we move clients to the most profitable group, those more linked or loyal? And the answer to both questions is yes.
The base of customer acquisition increased by a remarkable 50% year-on-year. Our total client base grew 8% in 1 year. In the same period, our most linked clients group, this 7.1 million, you can see in the upper part, grew 26% at a pace more than 3x faster than the total client base.
And finally, the full linked group is 14.1 million. The adding of the first 2 categories stands for 80% of our total revenue. So we strongly believe customer services are differentiated, in fact, which is reflected in that NPS that you can see on the right side at almost 63 points.
So I mean, we spoke -- in the next slide, we spoke about client growth. Now let me address how we cope technologically speaking with that huge growth, with that amount of growth. We boosted our capacity, speed and productivity to ensure that our technology initiatives were aligned with our ambition. The initiatives implemented will play a critical role in Santander's results in the future, particularly by shortening the time to market of new products and services.
The wide scale adoption and use of artificial intelligence and big data have already enabled us to increase the number of new process and deployment. So this is a fact already. This is not a plan. We are already using those facts as a way of growth. And by the end of the year, 72% of our operations will be running in the cloud.
In the next slide, you can see clients' growth in technology need also people. Regarding inclusion, women already make up 30% of our leadership positions and 26% of our employees are black. We have already achieved the objective that we had for next years with still a lot of room for improvement. As part of the collaboration process, we incentivize knowledge dissemination with employees acting as leading figures.
Training is key in our model, 3,000 courses, more than 70% of them being given by employees, by internal people. As a result of our actions in this field, we were recognized by Great Place to Work in both the human (sic) [ women ] and the LGBT categories in 2021.
And finally, the next slide, society in which we live. We aim and we have said with you during the last 6, 7 years, not just the last quarters, to contribute to the development of our communities. We have executed business-wise a total of almost BRL 28 billion in green businesses.
Apart from working with large companies and bond issuances and project finance, we are also expanding our presence in micro credit through Prospera, which ended the second quarter with a loan portfolio of BRL 1.5 billion and more than 600,000 customers. Additionally, we have set specific targets to reduce carbon emissions, help with environmental conservation and increase the use of renewable energy sources.
We also give back to society by engaging in social initiatives such as the donation of our 200,000 food baskets in collaboration with our employees and customers. These efforts have earned us a spot on Exame Magazine's list of the best ESG companies here in Brazil.
And all that is also supported by part of our business. Our position as one of the best banks for large corporations is further strengthened by our leadership in the wholesale segment that you can see in the next slide. We are Brazil's obviously only international bank with a full range of services.
For example, for the eighth consecutive year, we have ranked as the largest ForEx bank. On top of being a major player in infrastructure advisory and financing, having risen to the top 5 in energy trading in just 1 year, we are also becoming a benchmark for agribusiness with the largest agricultural commodities desk and leadership in green financing.
So all these leads in the next slide to our strategy. So all what I presented to you is based on an integrated business platform that reaches millions of active and potential customers with a comprehensive channel offering. This fact aligned to the current customer experience that I already mentioned in satisfaction, has led us to deliver the highest quarterly net profit in our history while maintaining our ROE above 21%.
In fact, it's the second best return on equity on our history, with 21.6% you can see in the slide. Recurrence enables us to generate returns above the cost of equity on a sequential basis and steadily creating value for our shareholders and outperforming the BOVESPA, the local index, in the process.
So moving to the numbers, the second part of my presentation. On Slide 13, we detail our P&L that we have published during the night. Second Q '21 figures do not include the net. This is important, Sergio commented in his introductory words, as the spinoff was approved on the last day of the first quarter. So what you are seeing is already with Getnet excluded for the -- from the numbers.
We closed the period with a net income of BRL 4.2 billion, the highest we have had ever reported for a single quarter, representing a little bit more of a 5% increase compared to the first Q of this year and 8% on a year-on-year basis.
Let me highlight some key messages here. On the revenue front, NII was stable in the quarter and saw a slight increase relative to last year, reflecting weaker market activity in the period, but better client activity.
Fees increased by 27% over the same quarter last year. Here, the customer base growth in higher activity boosted cards, insurance and financial advisory revenue. And on the expense side, provisions stayed under control, in fact, is stable on a year-on-year basis with a strong growth of the credit portfolio and pricing in the quarter, more aligned with that loan growth.
General expenses are increasing at a lower -- clearly lower pace than inflation and below the revenue growth, fast, improving efficiency. Efficiency ratio, at the level of this 33.8% that you can see on the lower part, this is our lowest ever and probably, again, as it has been during the last several quarters, the best in the country.
Recurrence ratio reached a level of 92%, as you can see. Capital is strong at 12.6%, the core equity Tier 1 ratio. And return on equity, as I mentioned, 21.6% being the second all-time high we have presented to you.
On the next slide, it depicts the evolution of our NII, highlighted by, as I said before, customer NII, which advanced by 1.6% Q-on-Q and 4% year-on-year, with product NII benefiting from positive volume dynamics as you will see on the next slide. The spreads, despite a slight increase, tend to remain stable or even recover a little bit as we go through the quarter, given the better mix going forward. As anticipated last quarter, NII from market activities has come back to a more normalized level.
Advancing to the next slide, we can see that our loan portfolio grew by 3.5% Q-on-Q and almost 15% year-on-year to this BRL 440 billion at the end of the quarter. The individual segment continued to outperform with mortgage and payroll loans bolstered in growth.
Consumer finance grew by 1.7% Q-on-Q and close to 10% year-on-year amid a challenging scenario for the automotive industry. SMEs had a good quarter, growing 6.5% attributable to a recovery in demand. Corporate lending also performed well in the face of a weaker ForEx rate. Disregarding this impact, the portfolio would have grown by 6.3%. So the 4.2% that you see in the slide will have been 6.3%.
On the deferred loan that you may see on the right hand of the slide, loan portfolio, it totaled BRL 32 billion, indicating an amortization of 35% since -- in the last 12 months since its inception, which I presented to you in June of last year. I remember to you that this was almost BRL 50 billion at that point of time.
The 15 to 90 days NPL, which I have also presented to you in different moments of time, reached 4.6%, which means an improvement compared to the previous quarter. In the previous quarter, that ratio, which now stands at 4.6%, stood at 5.8%. Finally, it's important to note that 71% of the individual loan book is collateralized.
On Slide 16, speaking about liquidity and capital, you may see that our funding has improved its performance in the second Q. Even in a more dynamic economic environment, time and demand deposits continued to show increases in their balances.
Financial bills, on the other hand, increased quarterly and -- but continued their downward trend on a yearly basis. We have issued some volume in the quarter to maintain a well-diversified funding base in the balance sheet. It had reached a too much probably low level in that sense.
At the end of the quarter, capital on the right hand stood at comfortable levels, as I mentioned before, the BIS ratio almost at 15% and the core equity Tier 1 at 4.6%.
Moving on to fees. The brighter spots in the quarter were credit cards, insurance and asset management, supported by customer base growth again and more importantly, stronger loyalty. The issues, I addressed in my strategic slides. Cards grew by roughly 40%, 4-0, year-on-year with higher transactionality and a good turnover.
Insurance went up by almost 29%, 30%, 28.7% year-on-year, thanks to a pickup in credit life insurance. And asset management, as an example, increased on the back of consortium and funds, consortium -- the consortium, the product -- the Brazilian product consortium and funds rising by more than 50%, 5-0, year-on-year.
In the next slide, we can see how our asset quality has evolved. It remained at a good and controlled level in the quarter with a high coverage ratio, reflecting our solid risk management. As expected, given early year seasonality, short-term NPL improved by 30 basis points Q-on-Q to 3.3% on the red line in the upper part, which remains below our historical levels. The 90-day NPL kept a healthy and comfortable ratio at 2.2%, quite stable, as you can see historically and even better than 1 year ago.
With a coverage ratio of 263%, we believe that the current level of additional provisions on our balance sheet of -- which I have presented to you of roughly BRL 6 billion, is adequate.
You can also see that our loan loss provisions stayed under control, consistent with a cost of credit of 2.7%, which is lower than in the same period a year ago. This performance, again, reflects our diligent lending practices.
And finally, recovery, that red small part you can see on the right bottom part of the slide, recovery continues to present levels above BRL 700 million per quarter, which is positive when compared to the old levels, the BRL 500 million to BRL 600 million range per quarter than we had in the past.
The next slide shows how our expenses have performed. We continue to have a strong efficiency agenda as in the last 5, 6 years, which has contributed to keeping our expense growth below inflation. We had a 4% year-on-year rise in total expenses, well below the 8.35% inflation in the period, so it's less than half inflation. We have conduct and will continue to conduct a thorough review of our expenses.
This performance corroborates our commitment to productivity, operating leverage in the P&L, which led our efficiency ratio to improve by 80 basis points year-on-year to that 33.8% that I mentioned before, a historical minimum in that sense. At this level, I also mentioned that it is possible, as we have done in the last -- for some time already in the last quarters that we remain as the best in the industry.
So to finalize my presentation and final takeaways, moving ahead to Slide 21, I would like to underline the following. Nothing compares to consistency, 6 years of profitable growth, and we remain focused for the next 2 years; the commitment to developing a robust and complete financial platform resulted in a record level of new customer acquisition; great business dynamics; the lowest efficiency ratio we have ever delivered, 33.8%; the second best return on equity we have ever delivered, 21.6%, despite the macro environment; a unique corporate culture deeply committed to growth, results and society.
Thank you. And now I open the floor for the Q&A.
[Operator Instructions] I will now pass the word to Mr. Gustavo Sechin. Please, Mr. Sechin, you may proceed making the questions sent via webcast. [Operator Instructions]
So good morning, everyone. So our first question, we have a question from Gustavo Schroden from Bradesco and also from Thiago from UBS. Although the NII with clients expanded in the quarter, the net interest margin with clients decreased quarter-over-quarter. Despite the stronger growth in line with better interest rate, what could explain such a decrease despite the better mix? Do you believe that the NII with clients should improve in the coming quarters? Any color on how could the loan mix and NII evolve in the coming -- would be very useful.
Okay. Thank you. I think we have 2 discussions here, which is the NII and the NIM. The NII, as was mentioned in the question, we are seeing good growth on the client side. So NII in absolute terms is growing given volume in terms of clients and given volume in terms of growth of the portfolio.
I already presented that the credit portfolio is growing at about 15%, almost 16% if we exclude the ForEx impact. So that capacity of growth, those more than 600 new clients per month that we are achieving, those new -- almost more than 2 million clients of -- that we will have, active clients that we will probably have by year-end, et cetera, all that is continuously affecting the different lines of revenues and specifically, the NII.
So my guess there is that we should continue in a positive direction. Now if we speak of the NIM, there, you have to consider how you obviously evolve or how you dilute or not your spreads going forward. And here, it plays a couple of things. It plays the mix and it plays, obviously, the funding cost.
Funding cost has been rising, as we all know, given the situation in terms of the [ deal curve ], et cetera. And the spreads, we have -- if you compare spreads historically, we have -- we are at levels that are the same ones or similar to the first Q of last year, better than fourth Q and a little bit lower compared to first Q. So we have stabilized that decrease of spreads that we have seen in the past and even improving compared to third and fourth Q last year, which means that the trend is at least flattish, if not improving in the different products.
We have products in which we are improving [indiscernible] which is -- we have products in which we are stabilizing them. So looking forward, NIM will be pressed by volume because for the goods, we have capital and we are deploying capital to that growth of credit. And at the same time, it will be to -- somehow diluted by that spread. I will see NII on the -- clearly on the positive territory. And NIM, it will be there around flattish depending on that final volume growth.
Thank you -- So our next question comes from Pedro Leduc from Itaú BBA. Angel, can you discuss a little bit more about first your technology, new initiatives of concentrating everything in a separate entity from the bank? Is it going to only provide service to the bank or other companies like Getnet?
Yes. We presented -- thank you, Pedro, for the question. We presented first, which is this new technological company, in which we will be including around 3,000 direct employees and another bunch of external advisers or external forces.
What are we trying to do? The first thing that we are trying to do is compete level -- at the same level with what we could call today technological providers, okay? I'm not speaking of competitors of the bank. I'm speaking of technological providers. And for that, building a new company in which you compete, as I said, in all senses, you compete hand to hand to that to those developers. Given the need for talent and the need for good professionals in that arena, we thought it was key.
The second idea is that this company, first, will provide services as a data center, okay, for other companies and why not, in the future, to sell data services to the market. So we will be building a new profitable in the future but very efficient, in the first part, provider for the bank, but obviously leveraging that to the market in the future.
Thank you, Angel. So the next question that we have here is from Flavio Yoshida from Bank of America. Fee income come very strong in the quarter. Should we expect such a pace of growth in the coming quarters? Do you believe that insurance business and cards should continue benefiting in this line?
Thank you, Flavio. Well, you're right. I mean fees are strong. But again, I would like to underline that they are strong as a consequence of what is happening in the bank. I have been presenting for you for several quarters already in years what our strategy was in terms of client attendance, NPS, in terms of attracting new clients and in terms of moving clients from the less profitable to the high profitable segment, obviously, based on service and capacity of attending them.
The NPS that I presented to you, the 63 or 62.7, the 63 points I presented to you, is close to the highest. I mean we have been moving in the last quarters in between 61 to 63. I remember to you that we started at 40. And we have been -- last year, we were throughout several quarters at the 50s, 57, 58, et cetera.
So it is clear that the bank is giving better service. When you give better service, you gain more clients. And when you gain more clients and they are happy with your service, they use you more so transactionality clearly improves. And this is how -- and this is why you can see what -- I mean, you said in your question, I mean, on credit cards, 40% year-on-year; insurance, 30% year-on-year; funds, 50% year-on-year; credit operations, 21%, but I will also underline for example, current account. I have always said to you that current account fees should trend to [ suffer ]. And as you can see there, they are in the positive territory.
Even considering the famous PIX effect, this new payment system that we have in Brazil by which you can pay immediately to another person and even compensating for that, that we have not -- we are not -- in a part of our transactions, we are not charging the money transfer fees. Even with that, we have current account and the positive territory again, demonstrating that growth capacity.
Now going forward, again, the same answer. We are -- we have clearly ended the quarter in a strong way in terms of clients and activity and transactionality. We are not changing that intention. So we will keep on -- including insurance in which you mentioned in the question, including insurance, which I believe is one of the good stories going forward for the next years, not next quarter. We believe that client growth and moving clients to more transactionality is a way of maintaining that high return on equity through fees.
Thank you, Angel. So our next question comes from Thiago from UBS, and this relates to our cost of risk, Angel. Santander Brasil cost of risk was 2.7 in the second Q 2021, which is below the pre-COVID level. Is it fair to assume that the quality of the portfolio is better now than in the past, and the cost of risk should be structurally lower than the pre-COVID level in the coming years?
Okay. Thank you, Thiago. Yes, you're right. I mean, the cost of risk is being maintained at low levels but at attractive levels. I think that -- and I can speak of this as a fact. I think you will buy from me the argument that we have already showed to the market, our risk capacity. I don't think this is something for the future. This is already Santander Brasil has clearly very good risk capacities.
As I showed to you last quarter, we have the lowest volatile credit cost in the industry during the last years. It's not only again quarters, it's years. So that means that -- I would say we have to somehow control this part of the P&L.
Again, flattish absolute numbers in provisioning with a credit portfolio growing 16% adjusted by the ForEx of 15%. Going forward, I always discussed with you, I mean I think this depends on how our macro view is with respect to the country. If the country stabilizes with the degree of liquidity that has with very good growth, I do think we are going to have a very good economic growth pattern in the second semester, for example, with good growth and again, stabilize -- I will not see why the cost of risk should increase.
Now if the situation gets volatile or -- not only because of Brasil, I'm speaking generally speaking, obviously, confidence will go down, and we could see some kind of marginally -- I would like to underline, marginally negative trend. But for the time being, we don't see kind of leading indicators that we should be worried about. We don't see deterioration.
We see -- I showed to you the prorated portfolio, BRL 50 billion 12 months ago, BRL 35 billion now. So people are paying NPLs both [ early arrears ] and 90 days NPL in that portfolio improving. So I do think that things are under control. But I would link that answer to the macro, the macro [indiscernible].
Thank you, Angel. So our next question comes from Jorg from Citibank. Although the transition in the management had been planned for some time, the announcement was a bit surprising given Rial's [indiscernible] as a Chairman of the Board and the Group Board. Is it reasonable to assume that this is a [indiscernible] in the transition in Brazil and that in the future, he may occupy other executive position in the group?
Thank you, Jorg. Well, you heard Sergio. I think he was absolutely clear. He is not leaving. He's not going away. He is staying. He's staying as Chairman of Santander Brasil, and he will be absolutely involved in continuing the trend you have seen in the last years.
So he continues as also member of the Group's Board as he has been in the last also times. He continues involved as Chairman of Ebury, which is something, as you probably know, that we -- the group bought also some time ago. He is also involved in the Board of PagoNxt, this payments holding company that the group is constructing -- building with Getnet also.
So I mean, we could argue anything, but he is absolutely devoted and focused on maintaining what we have been delivering as a team. And I'm sure Mario will continue with that positive initiatives and positive ideas, and you will see that in the next years.
Thank you, Angel. Our next question comes from Britta from Autonomous. Getnet TPV is up 11% Q-over-Q despite the meaningful change in active merchants and revenues are [ owned ] by a small amount Q-on-Q. What explained this dynamic, maybe more business with larger merchants? What are the recent margin trends you should see in the market, you have slightly rebalanced the funding mix? What is the optional funding mix that you would like to maintain in the long term?
Okay. Thank you, Britta. Getnet, I think Getnet -- well, first of all, as you know, the operation has been approved by the Central Bank, the Brazilian Central Bank. Now we are in the process with the local SEC and the U.S. SEC. I don't know, but it looks like somehow, by the end of this quarter, we should be at least -- it doesn't depend on us the timing, but the best estimate that we have up to now is that one.
Getnet is having very good trends. Getnet, first of all, what we have seen basically or I would say, due somehow to the pandemic situation, a little bit of a change of mix. If you remember, Getnet has always been like 60-40, 60 retail, 40 wholesale. And this trend has reverted in the last year to increasing wholesale weight compared to the retail. The objective is to, again, grow in the retail business. We have devoted external channels for that, et cetera.
So -- but I mean, the management of the TPV is key for us. We have several KPIs there. We have the TPV that you mentioned. And what we do, even growing in wholesale is clearly managing that TPV, we managed the EBITDA margin. I remember to you that we are in the range of 58% to 60% in those last 2 quarters. That is 10 percentage points better than 12 months ago, which was 48%.
But let me give you a couple of numbers. Amount of turnover, I was going to say, turnover growing year-on-year close to 80%. Anticipation, growing year-on-year 90%, 9-0. Client base growing year-on-year close to 20%. E-commerce with a market share of 33% in the country in the first semester, e-commerce doubling, growing close to 100%, 99%.
So I mean, I think that the trends of Getnet speak for themselves. Again, I remember you that the numbers you have seen from the bank are not in the second Q -- only the second Q, do not include the Getnet's number. And as it will be listed in the next weeks or months, you will start to have that information in a more detailed basis coming from both Pedro, the CEO; Andre Parize, the CFO; our Investor Relations team, Luciana.
The Q&A session via telephone is open now. [Operator Instructions] Our first question comes from Mr. Jorge Kuri with Morgan Stanley.
Congrats on the great numbers and all the best of luck to Sergio and to Mario on his new role. Can I ask a question about your NII growth for the next 12 months? It seems that the different parts that drive it are all moving in the right direction.
You mentioned strong economic growth in the second half of the year, which should push credit up. The mix is improving SME loans. Consumer loans are growing faster than corporate loans. And then you have Selic rates, which are going up rapidly in what is likely an asset-sensitive balance sheet.
So is it fair to say that we should see a strong acceleration of your NII growth over the next 12 months? And if you can help us quantify what that could be would be very useful.
Thank you, Jorge. You have 2 components in the NII, clients and nonclients. On the client side, you're right. I mean we are seeing good volume growth, good time growth in number of clients coming in the bank. So as I said, I would expect a client NII on a positive territory. And specifically, if we do see what I said I expect, I expect the country to grow close to 5%, 6% GDP, and that would be concentrated on the second semester, always thinking that, as always, no, specifying that the pandemic allow us to kind of have a normal life.
But you do have the other side, which is the nonclient side. I mean I already mentioned in past quarters and specifically, last quarter, that the nonclient part, which has come down to somewhere around the 2 billion, treasury is going pretty well, but it had a very good first Q and a more normal second Q. And you have, again, what we always discussed around the ALCO portfolio.
So with all that in mind, as you have seen, what was in second Q of last year, BRL 2.6 billion has come down to BRL 2 billion. So -- and that is a kind of a gradual process, while we have gained close to BRL 400 million, BRL 500 million on the client side. So those are 2 trends.
Again, I always say to you, be aware of the volatility of the nonclient side, but the trends, speaking of 12 to 18 months, should be a stronger client part of NII and probably, it will depend on the volatility. I'm not going to give an estimation here. But obviously, being volatile, but having a nonclient NII, which does not have strong growth rates.
But how does that all add up? Is the expectation flattish combined NII over the next 12 months because one thing offsets the other? Is it to have double-digit growth? I guess what I'm looking for is a little bit more of the magnitude and quantification of the possible outcome.
I would say that the NII as a total should be in the positive -- on the positive territory, not double -- I wouldn't speak of double digit. I will say just positive territory.
Our next question comes from Mr. Marcelo Telles with Crédit Suisse.
Congratulations once again on the great results, well deserved. My question is regarding your lending appetite. I mean, clearly, you've been growing the loan book very nicely and was particularly surprising to see a big growth in the SME portfolio, growing more than 6% sequentially.
And my question is, is this a factor of you increasing your risk appetites for your credit risk models? Or this is really the impact of you're keeping everything -- your risk stable and it's just a matter of more demand for credit? So how should we think about your credit risk policies and risk appetite to the current stage?
Thank you, Marcelo. I think it has to do again with that capacity of attracting clients, more than risk modeling and changes on what we already had. I showed to you in the first slide, the growth of clients. And when you do have that amount of hundreds of thousands of clients going in, obviously, you do have reflects on the several parts of the P&L and on the balance sheet.
I would say that we have to differentiate here a little bit. If you remember, we have had a little bit of kind of 2 phases in the last 3, 4 years. Our first phase in which retail individuals were growing a lot and corporates, et cetera, were not. That stabilized and even reversed last year. And specifically with the pandemic, a lot of the company's corporates increased debt significantly, not knowing what was going to happen and probably to some extent in an excessive way. And that is reverting obviously, 12 months ago or 6 to 18 months afterwards, as they realized that the situation is not as bad -- it's not bad at all, but I mean it's not as bad as they expected.
So probably, what we will see is more growth on the retail side, SME side and smaller in the corporate and by far, much smaller on the large corporates, okay, because of 2 ideas. First is competition from other funding points like capital markets or even the equity market. And secondly, when you start to have those type of growth rates, spreads tend to narrow.
And as I have said before, in the last 7 years I have been here, is that we do not fight for market share. We do not fight for volume. We fight for profitability. And this is going to continue like that in the future. So if those kind of operations or in the last quarters, given the competition from those other funding points, it starts to be narrow enough, we will just let it go as we have done in the past. And I have said this with you in different times. So thank you, Marcelo.
Our next question comes from Mr. Thiago Batista with UBS.
Congratulations for the results, very good numbers. My question is about the capital position of Santander. So if you look at the capitulation now, the bank has core capital of 12.6%, Tier 1 of about 14%, I think, it's 13.7%, so a very good level capital. So with the end of the overhead, it's possible to see the bank operating with a higher leverage. So this is feasible in the near future.
Yes. Thank you, Thiago. You're right. I mean we do have capital levels. I presented almost 15% BIS ratio and 12.6% core equity Tier 1. First, management of capital will continue to be in the line of funding that credit growth and that operational risk and market risk, which is very low, by the way, that we have in the bank.
I have always said to you, I mean, if we think of risk-weighted assets growing at around, what, we have to wait, 10%, 11%, 12%, and our return on equity that we have above 20%, you end up with a payout ratio around 50%. So that's kind of a general thing.
But let me say with you what we have done in the first Q and what we have announced in the second Q. In the first Q, as you know, we -- the Board approved and paid by the bank BRL 3 billion in dividends as regular dividends, which compared to BRL 1 billion the previous year. The previous year, as you know, we were limited by the Central Bank. So that means that we were a little bit -- and I mentioned to you in the call to all of you that it gave a kind of a signal of how we were thinking.
Now the Board has approved a BRL 3.4 billion dividend for this -- that will be paid by the first days of September. If I'm not right, that will be already in the price during July. That is already BRL 6.4 billion of dividends in the first 6 months. This dividend payment that I am saying to you that has just been approved, which is interest on capital on -- 100% interest on capital is BRL 3.4 billion, means around 60 basis points, a little bit less of 60 basis points of core equity Tier 1, which means that the 12.6% goes down to 12% as we speak.
So I have always said to you, I mean, the 12%, 11.5%, to -- certainly, we want to -- stays at 11%, I mean, this bank can clearly run at those levels of capital. But I will lead you with the main idea here, which is Santander, on top of being a growth history -- sorry, story, top growth story, it's paying a nice amount of dividends. I mean BRL 6.4 billion already over our market cap in 6 months is 4%. So annualized, you're speaking of 8% if we analyze it. I'm not giving any guidance on this point.
Our next question comes from Mr. Domingos Falavina with JPMorgan.
Congrats on the results. Indeed, very strong figures. Just 2 questions. I think your answer to Kuri on the NII outlook is super helpful. But like, I guess, if you could shed a little bit more light on what's happening with the current figures, I guess, more than for cash -- because we're seeing basically loans, as you said, growing about 15%, right, and the NII with clients going forward. But you're adding a lot of kind of riskier loans or higher spread loans, I should say.
So if you could kind of share with us just like qualitatively, what are the lines that are growing NII closer to loan book? If you were to break down like automobile, overdraft, credit card and unsecured consumer loans in general and corporate you can put together and what we're growing at 4% or below or even shrinking year-on-year? Just to kind of understand what are the main promoters or detractors of the NII when you're looking year-on-year.
Second question is on Getnet. I mean you mentioned a lot of the very strong operational figures. But one thing that's [indiscernible] to me here, and I'm sorry, I haven't looked at the full release, is that EBITDA grew -- I mean, volumes grew a lot, right, EBITDA grew a little bit. The earnings actually shrank. Your mix to wholesale explains a lot, I guess, the revenue growing less than the top line. But the question I had was on the difference between EBITDA, which seems went from BRL 640 million to BRL 730 million, growing kind of 15%, 20%, something that, versus [ earnings ] shrinking.
My question is basically, if this is the interest line and if it is a substantial compression on prepayment of receivables that's booked under interest, that drove this big difference between the move on [ the lines ] for taxes or depreciation.
Okay. Thank you, Domingos. On the NII side, the main forces there are real estate mortgages on the real estate side. We are producing -- we have [ months ] of over BRL 2 billion on that side. We have also payrolls growing nicely. We have personal loans also growing nicely. It has to do with mix, okay, the answer is to you, and to some extent, to a lower extent, car financing. But I would say that the first 2 are -- and that means mix. It means spread and it means volume. So that would answer you.
On the Getnet side, you do have this kind of volatility due to expenses. It's both fees and expenses throughout quarters. I wouldn't really struck a conclusion because you have specific things on one quarter, specific things on the other. Getnet will give light when we become listed or close to be listed, but that is basically it.
You have the funding side. You said that. The anticipation, I remember to you that the anticipation is funded by the bank, but it is pacified and done by Getnet. So that is something that happens, and we do it through a credit assignment with co-obligation with the merchants.
So that doesn't move the NII. It moves below the NII. And what we have extracted is basically fees and expenses with that volatility in the 2 quarters. I think we have time for a last question. Is there a last question or not? No.
Thank you. The Q&A session is over, and I hand over to Mr. Gustavo Sechin for his closing remarks.
So thank you. I just want to say a big thank you to everyone for joining us in our second Q conference call. And I also would like to reinforce that personally myself and our IR team are fully available whenever necessary. Thank you again and a very good day. Bye.
Banco Santander Brasil's conference call has come to an end. We thank you for your participation. Have a nice day.