trending Market Intelligence /marketintelligence/en/news-insights/trending/tki3x9b-tu_7vwiu-dgnpa2 content esgSubNav
In This List

XP Investimentos, sidelined from acquisitions, will continue with growth plans


Insight Weekly: Bank oversight steps up; auto insurers’ dismal year; VC investment slumps


Banking Essentials Newsletter: 3rd May Edition


Banking Essentials Newsletter: 19th April Edition


According to Market Intelligence, April 2023

XP Investimentos, sidelined from acquisitions, will continue with growth plans

Despite Banco Central do Brasil having barred XP Investimentos SA from acquiring competitors as part of its approval of Itaú Unibanco Holding SA's stake purchase deal, the brokerage firm's CEO said that it will continue on with its expansion plans, Reuters reported.

CEO Guilherme Benchimol reportedly told the newswire that XP Investimentos still aims to have 850,000 clients by the end of 2018, up from 700,000 currently, and 225 billion reais in assets under custody. The company plans to achieve these goals partly by recruiting bank branch managers as independent brokers, which would then bring in their customer base.

XP Investimentos could also renew plans for an initial public offering, with two of the company's shareholders, investment firms General Atlantic LLC and Dynamo Administração de Recursos, possibly divesting their stakes, Benchimol said. XP Investimentos previously postponed preparations for a planned IPO due to the Itaú deal.

The comments come after the central bank approved Itaú's 6.3 billion Brazilian reais deal to acquire an initial 49.9% of XP Investimentos' total share capital, of which 30.1% are common shares. However, the regulator imposed revisions on the original deal that will prevent Itaú from acquiring a majority stake in the brokerage company until at least 2026. The restrictions also aims at "reinforcing the autonomy and independence of the XP group," Itaú said.

Any bid to acquire a controlling stake in XP Investimentos is prohibited until 2026, Reuters cited two sources as saying. However, Itaú has the right of first refusal in the case of a third-party offer for the brokerage firm's majority stake after 2026, the sources said.

According to Itaú, the 30.1% stake purchase in XP Investimentos will bring down its Tier 1 capital ratio by 0.9 percentage point.

As of Aug. 10, US$1 was equivalent to 3.85 Brazilian reais.