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XP Investimentos sets up lending division for medium-sized companies

XP Investimentos Corretora de Câmbio Títulos e Valores Mobiliários SA is set to enter the medium-sized company lending segment through a new division named XP Empresas, Diário Comércio Indústria e Serviços reported.

The new area will be headed by Rodrigo Moreira, who had worked for Itaú Unibanco Holding SA in the last 20 years. Itaú acquired 49.9% of XP Investimentos in 2017.

With the new venture, the Brazilian brokerage company looks to create a platform that will match companies seeking financing with investment managers that want to add credit in their portfolios. The division could also offer capital market structuring for these companies, whose annual revenues must fall between 50 million reais and 750 million reais.

The venture will allow XP Investimentos "to democratize access to credit and compete with big banks through disintermediation," Moreira said.

The company aims to reach 150 correspondents associated with XP Empresas by the end of the year.

The credit market for local medium-sized firms is valued at over 100 billion reais, Moreira said.

XP recently received approval from the central bank to set up its own bank, to be called Banco XP, which will be launched at the end of the third quarter. In contrast with XP Empresas, Banco XP will focus on offering credit products to individuals.

However, XP Investimentos aims for XP Empresas and Banco XP to collaborate on certain products, such as insurance, surety and guarantees as well as foreign exchange services.

As of Aug. 23, US$1 was equivalent to 4.08 Brazilian reais.