Our bank is growing significantly and we wanted someone with substantial experience
In a single day, XP Investimentos announced both a leadership transition and a quarter shaped by forces beyond its borders — a reminder that even the most deliberate institutional ambitions must reckon with the unpredictability of the world. The Brazilian fintech, long known as a brokerage, is reaching toward something more complex: a full-service bank, with the hire of a seasoned Santander executive to guide that passage. The gap between aspiration and quarterly result is not a contradiction, but a portrait of a company mid-transformation, navigating geopolitical tremors while holding its longer arc steady.
- A war in Iran sent credit spreads surging in March, and XP — which marks 100% of its capital markets book to market — absorbed the losses directly in its earnings, unlike peers who can shield their P&L.
- First-quarter revenue of R$4.9B grew only 8%, well below the 16–17% full-year guidance, putting management in the uncomfortable position of defending targets they've already flagged as difficult to reach.
- To signal confidence in its strategic direction, XP simultaneously announced the hire of Gustavo Alejo — a 26-year Santander Brasil veteran — as CFO, tasked with steering the company's expanding banking, credit, and payments ambitions.
- Retail and corporate business lines showed double-digit and 26% growth respectively when mark-to-market distortions are stripped away, giving management a credible, if contested, case for underlying momentum.
- With a Basel ratio of 20.7% — far above the ~16% market norm — XP is sitting on excess capital, and closing that gap through buybacks and dividends could push return on equity from 21.7% toward 26%.
- Management is holding its full-year targets — double-digit growth and a 30% EBT margin — while bracing for continued spread pressure in Q2, betting that other revenue levers will carry the weight.
XP Investimentos chose a charged moment to announce its next chapter. On the same day it reported first-quarter earnings squeezed by global turbulence, the Brazilian fintech revealed it had hired Gustavo Alejo — a 26-year Santander Brasil veteran — as its incoming CFO. He takes over August 1st, after garden leave, replacing Victor Mansur, who spent fifteen years at XP and will stay on in advisory roles while studying abroad. CEO Thiago Maffra will serve as interim CFO in the meantime.
The hire is a deliberate signal. XP has spent the past year building out banking products, payment systems, credit lines, and foreign exchange services for both corporations and individuals. Maffra was direct about the logic: the company needed someone with deep wholesale and credit experience to lead that expansion, and Alejo's mandate will be developing exactly those business lines.
The earnings told a more complicated story. Revenue grew 8% to R$4.9 billion — well short of the company's 16–17% full-year guidance — dragged down by mark-to-market losses on debt securities. When war broke out in Iran in March, credit spreads widened sharply, and because XP marks its entire capital markets origination book to market, every movement hit earnings directly. Maffra called the impact temporary, noting that retail grew double digits and corporate grew 26% when those accounting effects are excluded.
On deposits, XP brought in R$38 billion in retail funding, though roughly half came from insurance payouts that clients chose to leave with the firm. Net new deposits of R$19 billion tracked close to the company's soft quarterly target of R$20 billion. Total assets under management reached R$2.14 trillion. XP also launched a new R$1 billion buyback and declared R$500 million in dividends, putting total planned shareholder distributions for the year at R$2.5 billion.
Capital remains a conversation. XP's Basel ratio of 20.7% sits well above the ~16% market standard, and Maffra noted that normalizing to market levels would lift return on equity — currently 21.7% — to roughly 26%. The stock has lost 8.5% over the past year and carries a Nasdaq market cap of $8.8 billion. Management is holding its full-year targets, expecting spread pressures to ease and other revenue drivers to compensate as the year unfolds.
XP Investimentos, the Brazilian fintech that built its reputation as a brokerage, is making a deliberate shift toward becoming something larger. On the same day it reported first-quarter earnings squeezed by market turbulence, the company announced it had recruited Gustavo Alejo as its new chief financial officer—a 26-year veteran of Santander Brasil who spent the last three years managing the Spanish bank's finances.
Alejo will take the helm on August 1st, after a standard three-month garden leave. He replaces Victor Mansur, who held the role for three years and spent fifteen at XP overall. Mansur will remain with the company in advisory capacities on subsidiary boards while taking time to study abroad. The transition has been in the works for months, according to CEO Thiago Maffra, who will serve as interim CFO until Alejo arrives.
The timing of the hire signals where XP sees its future. The company has spent the past year launching banking products, payment systems, credit lines, and foreign exchange services aimed at both corporations and individual clients. Maffra told Brazil Journal that bringing in an executive with deep wholesale and credit experience was essential to executing this expansion. "Our bank is growing significantly and we wanted someone with substantial experience in wholesale banking and credit," Maffra said. "We've launched multiple banking, payment, credit, and currency initiatives for companies and individuals, and we wanted an executive who could strengthen our capabilities in those areas. His main mandate will be helping XP develop these business lines."
The earnings report that accompanied the announcement revealed the headwinds the company is navigating. First-quarter revenue grew 8 percent to 4.9 billion reais, falling short of the company's full-year guidance of 16 to 17 percent growth—a target management has already signaled will be difficult to hit. Net income rose 7 percent to 1.32 billion reais. The shortfall stemmed largely from mark-to-market losses on debt securities held by the company's treasury and investment banking divisions. When geopolitical tensions flared in March with the outbreak of war in Iran, credit spreads widened sharply, forcing XP to record immediate losses. Unlike some competitors who can classify certain securities as available-for-sale and avoid hitting the profit-and-loss statement, XP marks 100 percent of its capital markets origination to market, meaning every spread movement flows directly to earnings.
Maffra acknowledged the pressure but framed it as temporary. The company is not disclosing exactly how much growth would have occurred without the mark-to-market impact, but he described it as "significantly larger." Retail business grew double digits and corporate business grew 26 percent when those accounting effects are set aside. "For the full year we remain on track," Maffra said. "Nothing changes in our plan to deliver double-digit growth and a 30 percent EBT margin." He expects further spread impacts in the second quarter—April saw spreads widen again, though less severely than March—but believes other revenue drivers will compensate.
On the deposit side, XP brought in 38 billion reais in retail funding during the quarter, though half of that came from deposit insurance payouts that customers chose to keep with the firm rather than move elsewhere. Excluding those insurance proceeds, net new deposits totaled 19 billion reais, roughly in line with the company's soft guidance of 20 billion per quarter. Total assets under management reached 2.14 trillion reais. The company also announced a new 1 billion reais share buyback program after completing half of a previous 1 billion reais authorization, and declared 500 million reais in dividends, bringing total shareholder distributions planned for the year to 2.5 billion reais.
Capital levels remain a point of discussion. XP's Basel ratio closed the quarter at 20.7 percent, well above market standards of around 16 percent. To hit its stated target of below 19 percent, the company would need to distribute 5 billion reais to shareholders this year. Maffra noted that if XP normalized its capital to market levels, its return on equity—which stood at 21.7 percent in the quarter—would rise to 26 percent. The stock has fallen 8.5 percent over the past twelve months and carries a market value of 8.8 billion dollars on the Nasdaq.
Citações Notáveis
Our bank is growing significantly and we wanted someone with substantial experience in wholesale banking and credit. His main mandate will be helping XP develop these business lines.— CEO Thiago Maffra
For the full year we remain on track. Nothing changes in our plan to deliver double-digit growth and a 30 percent EBT margin.— CEO Thiago Maffra
A Conversa do Hearth Outra perspectiva sobre a história
Why does XP need a CFO from a traditional bank right now? Isn't the company already successful as a fintech?
XP is successful, but it's trying to become something different. It started as a brokerage—that's where it made its name. Now it's building a full banking operation: credit products, payment systems, corporate banking. That requires a different skill set than what got them here. Alejo spent 26 years at Santander managing wholesale credit and corporate banking. That's exactly what XP needs to scale these new divisions.
The earnings look fine on the surface—8 percent revenue growth, 7 percent profit growth. Why is the market treating this as a disappointment?
Because those numbers are misleading. The company marks every debt security to market in real time. When spreads widened in March because of the Iran conflict, XP had to book immediate losses. The underlying business—retail and corporate—actually grew much faster. Retail was double digits, corporate was 26 percent. But the mark-to-market losses masked that strength.
So this is a temporary problem, or structural?
Temporary, according to management. The spreads widened in April too, but less severely. Maffra says other revenue levers will offset it. The real question is whether the company can hit its full-year guidance of 16 to 17 percent growth. They're already saying that will be hard. If spreads stay elevated, they might miss.
What about the capital situation? Why does it matter that Basel is at 20.7 percent?
It means XP is holding more capital than it needs. The market standard is around 16 percent. XP could distribute that excess to shareholders—and it is, with buybacks and dividends. But it also means the company's return on equity looks lower than it could be. If they normalized their capital, their ROE would jump from 21.7 to 26 percent. It's a sign of financial strength, but also trapped value.
What should we watch for in the next quarter?
Whether spreads stabilize and whether the new CEO can actually execute on the banking expansion. Alejo doesn't arrive until August, so Maffra is running things in the interim. The second quarter will still feel the spread impact. By the third quarter, if markets have calmed, we should see whether XP's underlying growth story is as strong as management claims.