Brazil's Itau said it has been considering spinning off most of its 46% stake in investment platform XP Inc and selling the rest, according to a securities filing on Tuesday.
The filing does not mention a reason for the plan, which is subject to board approval. A source close to the discussions said Itau hoped to unlock value in the bank’s XP stake that is not reflected in Itau’s share price, and reduce potential conflict between the two entities. When Itau first invested in XP in 2017, it was planning to acquire a controlling stake, but Brazil’s central bank objected, citing competition concerns. The regulator said at the time that Itau would need to seek approval to buy an additional 12.5% of XP in 2022. The potential spinoff follows a public spat in June, when Itau cited alleged conflicts of interest among independent investment advisers who are the bulk of XP’s workforce. Both institutions compete for investors.