The Brazilian bank has reached a record-breaking figure in assets under custody (AUC) at the end of 2020, as well as 2.8 million active clients.

XP’s total AUC reached BRL660 billion at the end of December 2020, reflecting an increase of 61% year-over-year and 17% quarter-over-quarter. The bank attributes the growth to high influxes worth BRL198 billion of net inflows and BRL53 billion of market appreciation.

“XP continues to expand its AUC as more investors look to diversify their allocation, especially amid the global low-rates environment,” Rafael Miranda, global markets structuring head at XP, told SRP. “In this scenario, structured products are one of the few vehicles to provide the globalisation of investments combined with some level of capital protection for the Brazilian investor.”

“As we began to offer a full suite of banking services, structured products became a strategic front to grow our franchise and keep us on the path to achieving our BRL1 trillion AUC milestone,” he said.

SRP data shows that Banco XP was the most prolific structured products issuer group in the Brazilian market in 2020 with 189 products worth BRL2.3 billion.

This can be compared with its issuance of just four structured products in Q4 19 with BRL25.7 billion in sales volume.

Trailing closely behind were Morgan Stanley with 99 products valued at BRL1.1 billion, Credit Suisse with 46 products worth BRL489 billion, and BNP Paribas with 44 products worth BRL430 billion.

The issuer’s most active quarter of 2020 was the third with over BRL1 billion in sales and 78 products. Banco XP assumed the top ranking during the second quarter with 33 products valued at BRL384 billion from third place in the previous quarter, having issued 23 products valued at BRL203 billion.

Banco XP has 224 live products in the SRP database, listed in the Brazilian market wrapped as COEs worth an estimated US$489m.

All the structured products issued by Banco XP have been distributed by the bank’s subsidiary XP Investimentos.

XP Investimentos currently has 1,457 live structured products in the SRP database that are listed domestically and wrapped as COEs.

The main issuers used by XP Investimentos include Banco XP with an estimated sales volume of US$414m, Morgan Stanley (est. US$127m), and BNP Paribas with an estimated US$56.7m in sales.

The bank’s adjusted net inflow totalled BRL37 billion during the fourth quarter of 2020, compared with BRL117 billion in Q3 20, BRL29 billion in Q2 20, and BRL15 billion in Q1 20.

The firm’s active clients grew by 63% and 5% during the fourth quarter relative to Q4 19 and Q3 20, respectively.

XP’s credit portfolio now stands at BRL3.9 billion as of 31 December 2020, which represents 0.6% of its total AUC. The credit book is mainly funded by the issuance of structured notes (COEs) and deposits which are distributed to clients via the firm’s proprietary platform.