February 28, 2024

XP owner resigns himself to Lula’s success and says it’s time to “raise the sails again”

Guilherme Benchimol, who supported Bolsonaro and Paulo Guedes, said the country is now entering a new cycle of growth in the investment market.

Guilherme Benchimol, Owner of XP Investimentos, and President Lula

Raquel Ballarin the information XP announced this Sunday (18), at an event in Argentina that brings together 650 consulting office partners, that it has exceeded R$1 trillion of client assets under its tutelage, excluding the assets of Banco Modal clients, which they obtained from this account. Enterprise at the beginning of last year. “Our goal now is to reach R$2.5 trillion and lead [do mercado de investimentos]XP CEO Thiago Maffra said.

Among individuals, XP has a share of 10.6% of the total investment volume of Brazilians of about R$ 6 trillion. The country’s five largest banks, together, own 80% of that market — one of them, on its own, has 25%. Investments of legal entities add up to another R$6 trillion. Data are from Anbima (Brazilian Association of Financial Entities and Capital Markets).

The initial prediction for XP was to hit the R$1 trillion mark at the beginning of last year. However, higher interest rates have reduced the pace of investments by clients of large banks moving to the platform. On the first quarter balance sheet, the organization’s assets held were R$954 billion, including the XP, Rico and Clear brands. In 2017, it was R$100 billion.

For Guilherme Benchimol, founder and chairman of XP, the high interest rate has slowed down the pace of financing, but the country is now entering a new cycle of growth in the investment market. “Now, it’s time to set sail again,” he told the crowd gathered at the Sheraton Buenos Aires Hotel. Brazil goes through cycles and there is a correlation between the dollar and the Brazilian market [de ações]. From 2000 to 2010, we had a cycle of dollar weakness and commodity boom. Ibovespa was up about 600% and the S&P was between 40% and 45%. Over the past 13 years, that has reversed. Now, everything indicates that we are entering a new phase.

Benchimol predicts that the dollar will become weaker (will be devalued) in the coming years, among other factors, because the US economy is heavily indebted. New moves for a strong rally in the US market are unlikely, according to him, because many assets are still “stretched” (valued).

Follow up on recommendations

In Brazil, the XP chief highlights two factors contributing to the preferred scenario for assets: reforms and interest rate cuts. According to Benchimol, the country has implemented several reforms in the past six years and these measures are beginning to bear fruit. He also brought data from a study indicating that in the past 30 years, every time the future interest rate fell by 3 percentage points, the economy’s base rate (Selic) ended up falling by about 6 percentage points, on average. Term.

Future interest rates have already fallen sharply in recent weeks. The 1-day DI due July 2024 on B3 traded at a rate of 12.47% on May 16th. On the 15th of this month, the rate was 11.95%. Financial markets expect that in August the central bank will start the downward cycle in the negative interest rate, currently at 13.75% per annum.

Back to basics – The event in Buenos Aires is the second international event held by XP with its network of B2B offices, which today includes 13,000 consultants. In B2BXperience, the company brought a roadmap of products and services for individuals to offices, strengthened its focus on the investing customer (“We don’t want to go down the pyramid or be a new bank offering credit,” CEO Mafra said) and brought in numbers indicating that its new complementary product offering Like credit cards, it builds customer loyalty and contributes to an increase in “portfolio share” – participation in the total investment by customers.

In new business lines, XP highlighted the International Investment Account for Individuals, which will have investment funds starting this week that should develop into a dollar (transactional) checking account and debit card by the end of the year; It also introduced transactional account functions for legal entities (today, the main operation of Corporate XP is investment and credit products with investments given as collateral) and revealed a new bonus policy that encourages integration between the operations of wholesale banks and the network of consulting offices.

More than announcing new products, the main message of the event was the “back to basics” movement, which was already the subject of Benchimol’s message to offices at the beginning of the year. “We were missing the basics,” Benchimol said in the Sunday morning session.

For XP, “back to basics” (returning to the origins or simple way of doing things) is to restore the relationship with the customer and their trust, in contrast to what was called at the event “Product Advisor” (which focuses only on presenting products) and competition based on Discounts Just as it did when it was founded, when XP Company sought to obtain its business model from the American Charles Schwab, the company returned to study the United States and determined, in numbers, the long-term sustainability of work and increased productivity of consultants based on the pillars of relationship and trust and providing value-added services, According to Guilherme Sant’Anna, Director of Marketing and Channels at XP Inc.