Shares of Brazilian investment management company XP (XP -3.62%) traded more than 14% higher as of 11:05 a.m. EDT today, after the company reported earnings for the first quarter of the year.
XP reported adjusted net income of $846 million Brazilian real ($156.9 million), more than doubling the profit it made in the first quarter of 2020. Net income also grew 17% from the previous quarter.
Total assets under custody grew to $715 billion Brazilian real, up 96% year over year, powered by $252 billion Brazilian real of inflows. The brokerage firm also reported adding 1 million active new customers in the first three months of the year.
"The Brazilian financial system is expected to generate approximately R$770 billion in revenue in 2021, and in 2020 we accounted for just over 1% of the total," Guilherme Benchimol, CEO and founder of XP, wrote in a letter to shareholders. "The avenue of opportunities for us to transform this ecosystem is wide, and we will not rest until this happens."
XP also said in the quarter that it plans to expand its banking services to large and small companies including new lending products, insurance products, an energy trading desk, debit cards, instant payment tools, and more.
With the new products that will allow XP to better penetrate existing and new clients, and the potential growth in the Brazilian market, the company looks well positioned to take advantage.