May 12, 2020 / 8:41 PM / 14 days ago

UPDATE 1-Brazilian digital broker XP's assets under custody surges on market volatility

(Adds share movement, CEO quote, details on new clients, background)

May 12 (Reuters) - Brazil's largest digital broker XP Inc reported a 58% rise in quarterly assets under custody on Tuesday, nibbling away at the dominance of the top banks in the country by luring more clients during the coronavirus-induced market volatility.

Founded in 2001 as an independent financial adviser, XP is the largest of a new breed of Brazilian digital brokers that has challenged the country's top five banks, which hold a vast majority of assets in the sector.

XP's shares were up 12.5% in the after-market trading.

"In the first days of the pandemic, we observed in Brazil a significant increase in interest in investments," said Chief Executive Officer Guilherme Benchimol in a statement.

XP grew its client base by 81% to 2.04 million in the first quarter, pushing assets under custody to 366 billion reais.

Net income rose to 398 million reais ($67.77 million), in the first-quarter ended March 31, from 210 million reais, a year earlier.

Total net revenue rose 86% to $1.74 billion reais. ($1 = 5.8724 reais) (Reporting by C Nivedita in Bengaluru and Carolina Mandl in Sao Paulo; Editing by Shailesh Kuber)

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