XP Inc.'s Q4 2024: Unraveling Contradictions in Risk Management, Fixed-Income Strategies, and Credit Card Innovations

These are the key contradictions discussed in XP Inc.'s latest 2024Q4 earnings call, specifically including: Risk-weighted assets and market risk, fixed-income take rates, and credit card proposition.



Revenue and Financial Performance:
- XP Inc. reported a 15% increase in total gross revenue in 2024, reaching BRL18 billion, and a sound 26% growth in earnings before taxes (EBT) to BRL4.907 billion.
- The strong financial performance was driven by an increase in retail investments, corporate and issuer services, and a robust EBT margin expansion.

Retail Investment Growth:
- The company achieved BRL26 billion in retail net new money, representing 37% growth year-over-year.
- This growth was supported by the company's strong fixed-income capacity and increased client assets, which rose to BRL1.22 trillion, aligning with a 9% year-over-year increase.

Fixed-Income and Cross-Sell Initiatives:
- Fixed-income products saw a 49% growth in revenue, with BRL3.447 billion achieved in the year, and credit cards grew 11% year-over-year.
- The increase was due to the company's market-making capacity and strategic investments in cross-selling initiatives, such as credit cards and insurance products.

Corporate and Issuer Services Expansion:
- Corporate and issuer services contributed BRL2.289 billion in revenue, marking 45% growth during the year.
- Growth was driven by the increase in debt capital markets (DCM) volumes and the expansion of corporate securities book, supported by the company's strong distribution capabilities.