May 13, 2020 / 4:40 AM / 22 days ago

Brazilian digital broker XP's assets under custody surges on market volatility

(Reuters) - Brazil’s largest digital broker XP Inc reported a 58% rise in quarterly assets under custody on Tuesday, nibbling away at the dominance of the top banks in the country by luring more clients during the coronavirus-induced market volatility.

Founded in 2001 as an independent financial adviser, XP is the largest of a new breed of Brazilian digital brokers that has challenged the country’s top five banks, which hold a vast majority of assets in the sector.

XP’s shares were up 12.5% in the after-market trading.

“In the first days of the pandemic, we observed in Brazil a significant increase in interest in investments,” said Chief Executive Officer Guilherme Benchimol in a statement.

XP grew its client base by 81% to 2.04 million in the first quarter, pushing assets under custody to 366 billion reais.

Net income rose to 398 million reais ($67.77 million), in the first-quarter ended March 31, from 210 million reais, a year earlier.

Total net revenue rose 86% to $1.74 billion reais.

Reporting by C Nivedita in Bengaluru and Carolina Mandl in Sao Paulo; Editing by Shailesh Kuber

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