(Adds CFO comments)
March 17 (Reuters) - Brazil’s largest digital broker XP Inc expects its clients to flock to fixed income assets amid the turmoil in markets caused by the new coronavirus, its Chief Financial Officer Bruno Constantino told analysts on Tuesday in a conference call.
Constantino said this move would likely offset withdrawals in equities, maintaining the net inflow of money, although XP has seen a drop in assets under custody from big clients. In the last quarter of 2019, net inflow of money was around 11 billion reais ($2.20 billion) per month.
“So far, net inflow of money is keeping the same pace (as before),” he said when asked about the impact of coronavirus crisis. “People will have to continue investing in something (despite the crisis).”
XP reported on Tuesday a quarterly profit that more than tripled, it managed to add more clients in a market dominated by traditional banks and bolstered assets under custody.
Founded in 2001 as an independent financial adviser, XP has been challenging Brazil’s top five banks, which hold a vast majority of the total assets in the sector.
XP’s active client base grew 91% to 1.7 million in the fourth quarter, boosting assets under custody to 409 billion reais ($81.77 billion), which more than doubled from a year earlier.
This is XP’s first quarterly earnings report as a public company after it listed its shares on the Nasdaq in December. The company is currently valued at over $10 billion.
Net income rose to 390 million reais from 113 million reais a year earlier. Gross revenue rose 90% to 1.82 billion reais. (Reporting by Munsif Vengattil, Bharath Manjesh in Bengaluru, and Carolina Mandl, in Sao Paulo; Editing by Arun Koyyur and Cynthia Osterman)