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XP's bank plans financial services marketplace, says CEO

Jose Berenguer, CEO of Banco XP, said it intends to offer third-party financial products including mortgages, car and payroll-backed loans and insurance

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  • XP seeks to offer financial services such as credit and insurance to the more than 3 million clients it serves;
  • The bank is also planning to offer financial products to the 35,000 companies that are XP’s clients;
  • XP bank is also testing digital accounts that will be offered to clients in the fourth quarter, putting the broker in direct competition with large digital banks.

Brazilian broker XP is bolstering its banking unit to offer financial services such as credit and insurance to the more than 3 million clients it serves, an executive said.

Jose Berenguer, CEO of Banco XP, said it intends to offer third-party financial products including mortgages, car and payroll-backed loans and insurance.

“We plan to offer to our clients products by different financial institutions, in a structure similar to a marketplace,” Berenguer said in a video interview with Reuters, without saying when the marketplace could start operating.

READ ALSO: XP acquires minority stake in Brazilian quantitative fund manager Giant Steps

The bank is also planning to offer financial products to the 35,000 companies that are XP’s clients. Through its investment banking division, the bank already advises companies on raising capital through capital markets instruments, selling bonds to its retail base or to funds that XP offers on its brokerage platform, for example.

XP has 130 investment bankers working on debt and equity issues and M&A.

So far, other forms of credit provided by the bank are collateralized, as the bank plans to remain asset-light. XP’s bank lends to investors with at least BRL 50,000 ($9,843) under custody with the broker.

READ ALSO: Warren Buffett’s investment firm Berkshire invests $500 million in Nubank

XP bank is also testing digital accounts that will be offered to clients in the fourth quarter, putting the broker in direct competition with large digital banks such as Banco Inter, which has Japan’s Softbank Group among its backers, Nubank, which has among its shareholders Warren Buffett’s Berkshire Hathaway, China’s Tencent, Singaporean state investor GIC and Canada’s pension fund CPPIB.

Investment bank Banco BTG Pactual has also been investing heavily in its digital retail bank.

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