Brazil's XP brokerage and Nubank fintech confront earnings pressure and high interest rates

XP Inc. posted first‑quarter 2026 adjusted net profit of R$1.3 billion, a 7% year‑on‑year rise but a 1% quarterly decline that missed analysts’ R$1.4 billion forecast. Revenue fell 7% to R$4.9 billion as fixed‑income inflows stalled under a Selic rate of about 14.25%. The firm announced a R$500 million dividend, a share‑buyback programme of up to R$1 billion and a change of chief financial officer, with Gustavo Alejo from Santander taking over the role. Total net capital inflows dropped 39% year‑on‑year to R$14 billion, though retail‑client inflows remained flat at R$19 billion.

Analysts at UBS BB see a different story for Nubank (ROXO34). After a 25% drop in its New York‑listed shares YTD and a rise in provisions that raised credit‑quality concerns, the bank recorded a record‑high net interest margin of 21.1% in Q1 2026. Its Mexico unit turned profitable, posting a US$14 million profit, and the company is poised to benefit from Brazil’s Novo Desenrola debt‑renegotiation program. UBS maintains a buy rating with a US$16.90 price target, estimating up to 28% upside if the next earnings report confirms the turnaround thesis.