Business

Brazilian broker XP’s profit gains from higher assets under custody

XP Inc (XP.O) posted a marginal jump in second-quarter adjusted profit as the Brazilian broker gained from a surge in assets under custody that offset a slowdown in inflows due to higher interest rates.

Last week, Brazil’s central bank raised its key interest rate by half a percentage point to battle the impacts of fuel and food shocks that have kept consumer prices rising above 10% a year even as growth remains subdued.

The country’s largest brokerage said its net inflows of 43 billion reais ($8.36 billion) were 43% lower from a year ago, while the total purchase value on XP’s credit card rose 161% to 5.5 billion reais.

Assets under custody rose 4% to 846 billion reais as people poured money into its diverse range of products such as bonds, derivatives and pension funds, while active client numbers rose 16%.

The company’s adjusted net income rose 1% to 1.05 billion reais in the second quarter and net revenue jumped 14%.

Retail gross revenue rose 14% to 2.79 billion reais, while institutional revenue saw a 16% jump to 436 million reais.

($1 = 5.1454 reais)