XTB Mules Exit From Brazil Six Months After Obtaining Operational License
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Polish fintech firm XTB is planning to stop its operations in Brazil less than a year after it was gained a license to offer its services in the country. XTB stated that these measures have complicated the market for foreign-based brokerages operating in the country.
Since its license approval, XTB has remained relatively inactive in Brazil, one of the largest economies in Latin America.
XTB Faces Tough Market Conditions In Brazil As Profit Continues To Drop
XTB received a license to operate in Brazil earlier this year. However, the company says it’s reconsidering all potential business options and could exit the market. The Polish fintech noted that the “current conditions in Brazil’s brokerage sector” are preventing it from establishing its business in the country.
XTB’s evaluation comes as the company faces a notable drop in profit, caused by weak trading conditions. The firm recorded a net income of PLN 53.2 million in the third quarter, showing a 74% drop from the PLN 203.8 million it recorded at the same period last year. It also saw a decline in revenue by 20.1% following subdued volatility across commodity and financial markets, reducing profitability.
In a recent report, XTB stated that the market was moving within a limited price range, even for instruments that are the most popular among clients in the region.
XTB Continues With Its Launch In Indonesia
XTB is still interested in the markets in Latin America, despite its troubles in Brazil. The firm is moving forward with its expansion plans in the region, with its Indonesian subsidiary being the focus lately.
XTB has started onboarding clients in Indonesia, offering ETFs and stocks. It also plans to add CFDs next year. The company received its Indonesian license late last year and has never looked back since. The license was XTB’s first in Southeast Asia.
XTB also holds an additional license from Chile’s Financial Market Commission, which was granted earlier this year, indicating the firm’s long-term commitment to Latin America.
According to XTB’s Chief Executive Officer, Omar Arnaout, Chile is a major player in the company’s global strategy. The firm will start onboarding clients in the country in the first half of next year. XTB has also rolled out eWallet, a multi-currency payment platform that supports cashless payments. More than 22,000 clients have already activated the app by September this year.
However, XTB is in a different situation with Brazil. The firm was pursuing Brazil’s license at the same time as others and has completed that process. The company says if the unfriendly measures continue for foreign brokerage firms, it may be forced to exit the market.
