XTB is
reconsidering its entry into Brazil less than a year after securing regulatory
approval, citing protectionist measures that have complicated the market
landscape for foreign brokerages.
XTB Licensed Since
February but Still No Activity
The Polish
fintech obtained authorization to operate in Brazil earlier this year and
started the process to join the country’s list of regulated institutions. But
the firm now says it’s “evaluating all potential business options,
including the possibility of ceasing further operations in this market,”
according to its third-quarter earnings report released yesterday (Tuesday).
What is the
reason? XTB says the “current conditions in the Brazilian brokerage sector,
especially local protectionist measures,” are preventing it from launching
brokerage operations in Brazil, one of Latin America’s largest economies.
The
reassessment comes as XTB faces a sharp profit drop driven by weak trading
conditions. Net income fell 74% year-over-year to PLN 53.2 million in the third
quarter, down from PLN 203.8 million a year earlier. Revenue declined 20.1% to
PLN 375.8 million as subdued volatility across financial and commodity markets
reduced profitability per contract.
“For
most instruments that are most popular among clients, a more predictable trend
was observed, with the market moving within a limited price range,” the
company said in its report.
Indonesia Launch Proceeds
Despite
local problems in Latin America, XTB’s Asian expansion is moving forward. The
brokerage’s Indonesian subsidiary has begun onboarding clients and offers
stocks and ETFs, with plans to introduce CFDs by early 2026. The firm secured
its Indonesian license at the end of last year, marking its first regulatory
approval in Southeast Asia.
Moreover, XTB received its Chilean securities license from
the country’s Financial Market Commission in February, signaling its commitment
to Latin America. Omar
Arnaout, XTB’s CEO, said earlier this year that Chile was a “key
player” in the firm’s global growth strategy. The company expected to
start onboarding Chilean clients in the first half of 2025.
Brazil, however, presents a different picture. The company had been pursuing Brazilian approval
simultaneously and completed that process as planned. But local market
conditions have since prompted a strategic review.
XTB also launched its eWallet service this year, a multi-currency payment solution that
nearly 22,000 clients had activated by the end of September. The wallet
supports cashless payments and transfers in 19 currencies.
This article was written by Damian Chmiel at www.financemagnates.com.
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