Greetings. Welcome to the XP Inc. Fourth Quarter 2019 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Carlos Lazar, Head of Investor Relations. Mr. Lazar, you may begin.
Good afternoon, everyone, and welcome to XP's first earnings conference call for the quarter and year ended in December 31st of 2019. I'm Carlos Lazar, Head of Investor Relations. Joining me today for the call are Guilherme Benchimol, founder and CEO, Bruno Constantino, CFO, Gabriel Leal, Head of Retail Business, Karel Luketic, Head of Marketing and Digital Content, and Frederico Ferreira, our Finance Director. We will be available for today's Q&A session. Also, our fourth quarter earnings release and presentation are available in our investor relations websites. I would like to remind that certain statements in this presentation and during the Q&A may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from these forward-looking statements.
Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our reports filed with SEC. Please refer to slide number two, Important Disclosure, of the presentation for a full disclaimer. Now, I will turn the conference over to Guilherme Benchimol who will deliver some opening remarks starting on slide five of the presentation. Thank you.
Good afternoon. It's a great pleasure to present our results to the market for the first time as a public company. I would like to start this call with a message of optimism. I can affirm that XP Inc. will continue to transform the financial markets to improve people's life while delivering solid results. That's because our long term perspective on the business was reinforced by the IPO concluded in December. It was another important step in our history, aligned with our goals of capitalizing the business and connecting with the investment community. Besides that, we recorded very solid operational and financial performance, achieving an asset under custody of 409 billion BRL and a net income of more than 1 billion BRL during the year of 2020.
Although we recognize the importance of those results, they're small when compared to the overall Brazilian financial system that counts with almost BRL 500 billion in revenue. Therefore, we are more confident than ever that this is only the beginning of our journey with a massive and concentrated market in Brazil, providing significant opportunities going forward. Combined with that, we have unprecedented low level of interest rates. Certainly, the thought of investment for Brazilians has become a priority, as it's no longer enough to buy government bond or certificate of deposit from a large bank as in the past. This trend represents an excellent opportunity for XP as investments and financial education are in our DNA.
Of course, depending on the macroeconomic scenario, the product mix may differ, but a very important fact is that our company does not need to create new investors, but only convince Brazilians who already invest that investing in our platform is the best choice. In this sense, another very important initiative that we remain focused on is getting even closer to clients during this period of high market volatility. For that, we are supported by our three brands, XP Investimentos, Rico and Clear, and an extensive state-of-the-art IFA network with 64,400 advisors spread across more than 600 offices nationwide that continues to promote the best services and offer over 600 different types of investment products. We are also holding several events and publishing a large amount of digital content, which will be for sure relevant to reinforce our competitive advantage and for the sustainability of our secure NPS.
Additionally, one of our main near-term challenges is to bring to our clients a complete banking experience to retain customers by allowing them to fully consolidate their investments with XP Inc., including their links with commercial banks where they have their checking account and portion of their investments. Finally, we are well capitalized with BRL 7 billion in cash, open to many opportunities, close monitoring the current crisis and its potential effects in our company. We definitely see us stronger to face it and to continue implementing our strategies to deliver sustainable growth and returns to our shareholders. Our successful history is full of challenges and various crises that we surpassed thanks to our culture, big dream, open mind, and entrepreneurial spirit, our partnership model and our long-term alignment in a horizontal meritocratic structure with the adequate targets and incentives.
We truly believe that these are the steps that will maintain XP ahead of its competitors and once again transform the impossible into possible. Now I'd like to hand the call over to Bruno to comment in detail on our operating and financial results. Thank you all.
Thanks, Guilherme. Good evening, everybody. If you notice any voice difference here is because we are apart because of this coronavirus crisis. Moving to slide seven, we present the evolution of our main operating KPIs, assets under custody, active clients and NPS. Our figures grew strongly in 2019, benefiting from the positive snowball effect generated through our brands and investments made to enhance our platform and UX experience. Our AUC reached BRL 409 billion in December 2019, expanding 17% versus third quarter 2019 and 103% year-over-year. The risk on mode of the markets in the fourth quarter 2019 helped our AUC number, especially through the equity appreciation of our custody. It is important to highlight that without considering the market to market of our custody, we've kept a healthy pace of net inflows during the fourth quarter with an average around BRL 11 billion per month.
Our second KPI, active clients expanded 91% year-over-year to 1.7 million, reflecting solid performance across all our channels and three retail brands. Lastly, XP ended the year with an NPS of 73, highlighting the benefits of our self-reinforcing ecosystem for all our clients. We will address the potential impacts of the coronavirus crisis in our KPIs later during this call. On slide nine, we show our gross revenue evolution and its breakdown across our businesses. 2019, total gross revenue was BRL 5.5 billion, a 72% year-over-year increase. The growth in the fourth quarter 2019 versus fourth quarter 2018 was even higher, increasing 90% year-over-year from BRL 957 million in fourth quarter 2018 to BRL 1.8 billion in fourth quarter 2019. The main drivers were, number one, mutual funds especially performance fees in retail.
Number two, equities and futures in both retail and institutional businesses. Number three, a steep increase in issuer services revenue. In terms of revenue breakdown, retail remains our most relevant segment line, representing 67% of total revenue versus 73% in 2018, with the delta being mainly a function of the increase in issuer services from 5%- 9% of total revenue, reinforcing our diversified revenue profile and the benefits of our synergistic ecosystem. Moving to slide 10, we see that 2019 was another outstanding year for the retail business. Following the strong AUC growth in macro tailwinds, retail revenue increased 56% year-over-year, reaching BRL 3.7 billion. In terms of asset classes, as already said in the previous slide, the main highlights were mutual funds through performance fees in equity and hedge funds and equities and futures trading which followed higher overall volumes in B3.
Looking at our retail take rate, there was a 20 basis points contraction in 2019 versus 2018 from 1.4%- 1.2%. The decrease reflects firstly, the zero brokerage fee strategy at our brand Clear, which is focused on power traders and was adopted in October 2018, therefore impacting results more meaningfully throughout 2019. The second factor was the steep increase in AUC which was caused by the stock market rally and large inflows in equities custody accounts without a corresponding growth in revenue. It is important to understand that concept when we think about AUC and take rate going forward.
When we compare the take rate of the last 12 months in third quarter 2019 with fourth quarter 2019, it has been stable at 1.2%. We do not expect material change in the take rate going forward, and we will talk more about it when we address the coronavirus crisis impact in our KPIs. On slide 11, we present our institutional and issuer services revenue segments, which also post strong results in 2019. Institutional revenue reached BRL 802 million in 2019. This represents an increase of 66% versus 2018. The growth was mainly driven by an increase in volumes of our Brazilian trading desks, following the overall expansion in B3 and increase in secured placement fees, with fixed income being the main contributor.
Our institutional sales and corporate access teams have been very active in 2019, with more than 1,700 meetings organized during the year, and successfully connecting institutional clients to executives, industry experts, and politicians in Brazil. Additionally, it is important to highlight our efforts and investments to continually qualify our institutional team and build strong long-term relationships with international clients. It is worth noting we recently added Fernando Ferreira as Chief Strategist and Head of Research coming from London, where he used to work for Merrill Lynch, and Fabio Frischeisen as Head of Equity Sales in New York, also coming from Credit Suisse in New York. On issuer services, revenue totaled BRL 507 million in 2019. The growth relative to 2018 was 185%.
The main highlights of the year were in order of contribution, one, DCM, debt capital market, our main revenue stream, which is very recurring in nature and resilient through market cycles. Two, REITs offerings, three, ECM, equity capital market. Moving to slide 12, we show our digital content and other revenue. Digital content revenue reached BRL 112 million in 2019, up 108% year-over-year. The result was mainly driven by the increase in sales of online educational products through our XP Educação portal. During the quarter, we also launched Spiti, a retail-focused independent research house that enhance our high-quality content. We believe this revenue segment will continue to grow in 2020, more importantly, is a differentiated tool to connect us with our customers in times like the one we are living right now. More about that later in the presentation.
Other revenue grew 180% in 2019 versus 2018 and total, BRL 420 million. This is mainly related to our market maker businesses and platform growth, enabling our ecosystem to function well. On slide 13, we present our COGS and operating expenses analysis. COGS, which is mainly IFA commissions and clearing house fees, reached BRL 1.6 billion in 2019 versus BRL 491 million in 2018, representing a 71% growth rate, just in line with our revenue growth. Gross margin expanded 50 basis points in 2019 to 68.7%, basically due to product mix. Moving to operating expenses, there was a 44% annual increase in 2019. As a percentage of net revenues, expenses decreased from 42% in 2018 to 35% in 2019, reflecting the benefit of our operating leverage. On slide 14, we present adjusted net income, which reached BRL 1.1 billion in 2019, growing 119% from BRL 491 million in 2018.
Adjusted net margin expanded from 16.6% in 2018 to 20.9% in 2019, above the midpoint of our guidance of 18%-22% range. In conclusion, 2019 posted strong numbers across all segments of our ecosystem. I would like to reinforce our long-term commitment and goal of growing our businesses while maintaining a high level of profitability. Now, I'm going to talk about our new businesses and the potential impact of the coronavirus in our numbers going forward. Moving to slide 16. Here we present a roadmap for new businesses.
Most of it is related to the concept of providing our investor customers a full service platform, including banking services such as a digital bank account, payments, and debit and credit cards, so our clients can cut completely the link with incumbent banks, and we can grow our share of wallet. Despite the crisis, we understand these initiatives create long-term value for XP, and we are moving forward as planned. We know it is important to be flexible, agile, and evaluate the scenario as the crisis evolves. Regarding our debit and credit card initiatives, we are thrilled to announce our partnership with Visa as the issuer partner of our cards, which we plan to launch still this year. We found in Visa the best partner in the card segment, as they bring a blend of superior services with scale and a global acceptance footprint to all our customers.
We are confident that the combination of our investment and financial digital services with the new cards to be launched with Visa will further enhance the experience of our clients. Other highlights worth mentioning, and I already talked about it quickly, is the Spiti business run by Luciana Seabra, which is an independent provider of investment content, as already said, needed more than ever in times like this. We are going to talk about our view of potential impacts of COVID-19 crisis in our businesses. Moving forward to slide 17. We analyze the potential near-term impacts to our businesses related to the coronavirus crisis. It is important to highlight that these are management's opinion and not facts for sure, and we are in an early stage of this crisis in Brazil, so it's hard to make any forecast.
Having said that, in terms of assets under custody, the steep decline in the stock market, of course, negatively affects our equity positions, but not necessarily the net inflow, and that's very important. We believe to be at a very early stage of this crisis, as I said, to conclude if these positive net inflows are going to compensate or not for any drop-down in the stock market regarding our AUC at the end of this year. Moving to product mix on the right upright on the slide. If we compare with what happened in past crisis, we should expect to see a rise in demand for fixed income products due to recent market sell-off. The difference nowadays, though, is the all-time low interest rates in Brazil, around 4% per year, and maybe going down even further.
Our customers will have to invest in something, and we will be there to help them navigate through these hard times. When we talk about net inflows on the bottom of the left side of the slide, it is our expectation that it will keep a positive trend. Again, it's hard to say if the pace of growth will diminish or not going forward. Up to now, we haven't seen any major change in our net inflows, except for few clients with large equity custody, but without necessarily causing any impact on revenue. For example, all the clients with more than BRL 1 billion of equity custody in our platform as of today represent, in aggregate, less than 10% of our total custody, but generates less than 0.1% of total revenue. This lead us to the take rate.
If the AUC suffer from redemptions from large equity positions that do not provide revenue, like the example I just gave, our take rate should go up, just analyzing this factor. If there is a shift in mix towards fixed income, which is possible, it will depend. Despite equities having, in general, a higher take rate than fixed income, the latter has a much bigger market, lower churn, and usually upfront fee payments. Again, under this uncertainty scenario we are facing, it's too early to tell how our take rate is going to behave in 2020. Although we understand this is a different crisis, just to try to give you some additional color, we highlighted in the next slide what happened in our KPIs in past crisis in Brazil. Moving to slide 18. We picked here three episodes in Brazil.
2014 elections, Joesley day in 2017, and the truckers strike in 2018. In all of them, despite the drop in the equity market, our AUC and net inflow performed well. As any portfolio manager understands, of course, I do not have to say that past performance is not a guarantee of future performance. I guess the point I'm trying to make here is the following. Number one, we need to be nimble, agile, adaptable, and learn quickly from the crisis. Number two, our business tends to be less affected by the crisis than other businesses since it is largely digital and less dependent on logistics. Number three, we still see a massive long-term opportunity in front of us. Again, with 90% of the BRL 8.6 trillion addressable market is still concentrated mainly in five banks. Number four, the competitive environment remains unchanged.
We believe our platform is positioned better than ever to overcome this crisis, and we have the opportunity, one more time, to differentiate ourselves from the incumbents. Remember, we are focused on investments with a unique IFA network close to our customers. That is a huge difference in our view, especially in times like this. Moving to slide 19, you can see, as Guilherme presented in the beginning, XP's strong cash position, especially after the IPO and our extended debt maturity. We have more than BRL 7 billion in cash and only BRL 0.4 billion of debt maturing in 2020. From a cash point of view, we are in a comfortable position and situation to navigate through this crisis. Regarding our risk metrics, we follow daily our VaR and stress tests among other metrics, and both have behaved well despite the increase in volatility.
We do hedge our positions to protect our book of flows as market makers. Just to give you a sense, as of yesterday, our VaR, one day and 95% of confidence representing 0.08% of our net worth, and our stress tests represented 0.79% of our net worth, all well below the targets we have established in our company. Let's move to my last slide and talk about some opportunities we understand this crisis bring to us as any other crisis. In slide 20, it is our belief that every crisis is an opportunity to get closer to customers, and that is exactly what we have been doing. In this context, we benefit from our financial education DNA and digital content platform. Since the outbreak of the coronavirus crisis, our strategies, research analysts, and digital influencers have intensified the publishing of reports and broadcasting of videos.
We have been increasing the touchpoint with our clients. To date, more than 30 reports and lives were posted about the crisis, with more than 600,000 views. We also publish daily market open and close live videos and post using not only the main social media channels, but also our proprietary investment portal, InfoMoney, our own TV network, and XP Educação. As shown in the charts on the right, the number of interactions and views increased sharply this month, reflecting our communication efforts. Through the first half of March, we already had nearly the same level of traffic on our research platform as in the entire month of February. InfoMoney's traffic also remains high, with more than 5 million visitors through March 13th. Again, education is in our DNA, and we believe information is key during periods like the one we are going through right now.
Lastly, as Guilherme mentioned, the total addressable market remains huge. Our partnership keeps focused on the long term. We believe the company is stronger than ever to go through the crisis, and if necessary, we will adapt quickly. On behalf of XP, I'd like to thank you all for your interest, and now we'll open the call for the Q&A session. Thank you very much.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull up the questions. Our first question is from Tito Labarta, Goldman Sachs. Please proceed with your question.
Hi. Good evening, everyone. Thank you for the call and very thorough presentation. I have a couple of questions if you could help. I guess, first on your AUC, I understand it's difficult to predict in terms of market movements, the impact, but just trying to get a sense. If we look in the fourth quarter, Ibovespa was up around 11%. I estimate that market appreciation benefited your AUC roughly 7%. I don't know, in terms of maybe the asset mix or just trying to understand how the market movement could potentially impact your AUC. If the market falls 10%, how sensitive will your AUC be to that? I understand it's not just equities but other products you have under AUC. If you can maybe help us to understand a little bit from that perspective.
My second question, Bruno, you mentioned that you don't expect material changes in the take rates. I understand on a quarterly basis and given the current market scenario, it's very difficult to predict. During IPO, you were saying that the take rate could fall maybe closer to 1%. Do you think it stays in longer term perspective, this 1.2 that we saw this quarter? You do think that's sustainable now? Did something change, you know? Earlier you were saying it could be closer to 1%. Just to understand how you think about that from a longer-term perspective, removing some of the short-term volatility. Thank you.
Okay, Tito. Thanks for the questions. Going to question number 1, the AUC. As we said during the IPO, basically we have three main parts of breakdown the AUC. Equities, fixed income, and funds. In funds, we have all kind of funds in that third part. It varies from time to time, but you can assume that those three are the main parts. Of course, with the market drop down, the equity part and a smaller part of the funds, they tend to go down as well in terms of AUC. As I said in the call, in the presentation, not necessarily these drop down will have an impact in revenue, especially if we're talking about a portion of the equity AUC that does not contribute in a relevant way to our retail revenues.
We are one of the main players in the stock loan market, so we do have a large portion of equity custody in the market. That large portion does not necessarily bring retail revenue. That's why it's hard to forecast the take rate, going to your second question, because it's a function of retail revenues divided by, of course, the AUC. Maybe if the AUC goes down, losing part of the custody that does not contribute to the revenue, then the take rate should go up by this fact isolated, as I said in the presentation. Going to the 1.2, going down to 1% or higher than 1.2, it's the same thing that we told you during the IPO. It's hard to forecast.
We believe that there is not a price pressure in terms of the funds and everything else in the market, considering that we already have, as I said, for example, a zero brokerage fee for equities at Clear, one of our brands. We don't see that. It's going to be more a function of the type of revenue that comes in and how the AUC behaves regarding the market prices of all the securities that we have in our AUC. That's basically it. I don't know if I answered your question, but it's really hard to forecast those two variables, but I wouldn't expect the retail revenue. Let me put it in a different way. I wouldn't expect the retail revenue being impacted in a strong way because of a reduction of AUC because of market prices.
Thanks, Bruno. That is very helpful, and I understand the difficulty in forecasting it. Maybe just one follow-up, though. Moving on to the institutional revenues, we also saw a big increase there. Maybe if you can help us put those into perspective also in terms of market movements. How sensitive would that be to the movements in the market? We saw like BRL 300 million this quarter, up from BRL 173 million last quarter. How much of that benefited from the market? Conversely, how much could it be impacted in a negative scenario? Thanks.
Okay. Basically, the market appreciation that we had in fourth quarter represented roughly more than 40% of the AUC growth. It's not that you take the BRL 409 billion of assets under custody as of December, you take out the BRL 350 as of September 2019, it's not BRL 20 billion per month. As I said, the pace is closer to BRL 10 billion to BRL 11 billion of net new money per month. The rest is market appreciation. What I can tell you is the following. Up to now, we don't know how it's going to be going forward because of the crisis, up to now, we haven't seen any major impact in the net new money coming in. So far our platform has been healthy just as last year in terms of net new money.
Having said that, we might have, as I said, some equity custody withdraw, but not necessarily with an impact in retail revenues.
Thanks, Bruno. Sorry, I don't think that was my exact question, though. I was asking more on the institutional revenues, because we saw a big increase there with over BRL 300 million this quarter compared to BRL 173 last quarter. Just wanted to understand the institutional revenues in the context.
Oh, okay.
Of the market movement. Thanks.
Okay. Sorry about that.
No problem.
I missed the beginning of the question. Yeah, the institutional part, it's basically a function of volume in the market. As you said, we are investing outside Brazil. I mentioned the hiring of our another partner, Fabio Frischer, that came to join us. Also in the Brazilian market With our institutional sales services, we are one of the main players in the market as well. The increase in volume helped that. We have basically a little bit more than 60% of institutional revenue coming from Brazil, a little bit less than 40% from outside. Both markets performed really well in 2019. It's a function of volume, basically.
Okay, perfect. Thanks so much.
Our next question is from Mariana Taddeo, UBS. Please proceed with your question.
Hi. Thank you for.
Mariana, your line is now live. If your line is muted on your end, you will need to unmute it. Our next question is from Marcelo Telles, Credit Suisse. Please proceed with your question.
Hi. Hello, everyone. Thanks for the disclosure regarding the coronavirus impact. That's very helpful in your presentation. I have a couple questions. The first one, can you tell us how much of your revenues were related to performance fees on your asset management platform, including both your own and third-party funds? How do you think that should play out in 2020? Could that be a detractor to your revenue yield? My other question is regarding the growth in the XP. I know you touched those points in your presentation. The market is down close to 40% in the year to date. It looks like your equity participation in terms of revenues is close to 30% of your retail revenues at least. I know you mentioned there's a big portion for equity, a part doesn't really generate a lot of revenue.
How do you reconcile that, the fact that your brokerage side represents close to 30% of your retail revenues and given the decline that you've seen in the market, should we expect perhaps a bigger impact on your revenue stream, not only XP but on the revenues as well? Thank you.
Okay, Marcelo. Thank you. The first question about the performance fee. Yeah, it played an important role in the fourth quarter of 2019. We do not disclose exactly the number, but as you know, there is this seasonality in our business regarding the performance fees that are charged in the middle of the year in June and in December. Because of the market appreciation we had last year, the performance fee was relevant in that sense. Going forward, of course, looking at the market right now with the picture that we have, the performance fee would diminish significantly. We don't know how it's going to be in June, neither in December. Having said that, the business has other ways to compensate itself. That's the beauty of our self-reinforcing ecosystem in our business. They are all interconnected somehow.
Because we are focused on investments, the important thing to bear in mind is people will have to invest in something, right? Either a government bond or equity funds, or directly in equities or fixed income security or REITs, but they will have to invest in something. It's a function of the price of the security and the frequency of the trading and the investments made in our platform. Up to now, this year, when the crisis started, what we noticed is the following. The price, of course, it's down. As you said, the stock market's around 40% down from last year, but the frequency has been very high compared to last year. It's early to tell how it's going to behave looking forward. We could have a short-term impact. Of course, we are not immune to crisis. I think nobody or almost nobody is.
What we try to give a sense here is more a long-term view. We believe, as any crisis, this one is going to pass. We cannot predict how long it's going to last, but it's going to pass. Not necessarily the impact is going to be as hard as some might think, looking at the drop in the stock market. As I said, this ecosystem that we have in our business model can compensate itself somehow. Your second question about the AUC and the impact of the equity, I think I kind of answered that. Of the equity, as I said, the equity going down, the AUC of equity going down, if this part that goes down or leaves the platform is not related to the revenue, the take rate will go up and not necessarily we're going to lose revenue because of that.
Of course, at a lower price in the market for too long, without frequency of tradings and so forth, in the equity part, you can have an impact there. Then you compensate in other parts of the business because people, again, will have to invest in something, right?
That's very helpful. If you allow me, just one extra question. Regarding your technology, your IT systems, during this time of volatility in the market, it seems that XP, according to the press, had experienced several issues in terms of speed and people not being able to trade or maybe things taking slower in the platform. We've heard that from some IFAs as well. How do you feel about the current state of your IT platform? Do you think you may have to invest more to be able to solve some of these bottlenecks down the road? We're interested to hear your thoughts there. Thank you.
Okay, great. Yeah, the platform, what I can tell you is that the platform is working just fine. We have IT team all over it. Just bear in mind that XP is by far the leader of the market, right? If we talk about retail in Bovespa, in equities, we have around 50% of market share. If we go to futures, that number goes up to 60%. We have the volume of the market. Now, imagine that increasing by a number of five, for example, people trying to log in at the same time. Of course, you can have one or other problem in terms of intermittency in the platform.
All of that we had on Wednesday, when Brazil stayed closed for two and a half days, and the market was melting down outside Brazil, and when it opened, everybody just jumped in at the same time. It's normal. In any place, you're going to have some people will have a problem. We kept our market share stable throughout times. Nowadays, the platform is working just fine. We don't have a problem in terms of the platform. You can check, the best way that I recommend you to check that is just go and look at the market share in all kind of markets that we trade in Brazil.
Thank you very much.
As a reminder, we are now conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Our next question is from Mariana Taddeo, UBS. Please proceed with your question.
Hi. Good night. Sorry about the connection before. I have a question. You mentioned earlier that on inflows, you are not seeing major impact from coronavirus. I want to understand a little bit better, in terms of product mix, if you're already seeing some changes, and in case of redemptions, not only from the mutual fund, but also from maybe the pension products. Thank you.
Okay. Thank you, Mariana. The inflows, as I said, so far it's been business as usual. We have in our DNA the education business. The financial education business. In times like this is more important than ever for all the Brazilians. One other point to make here is that different than other crises that we have, and each crisis is somehow unique in itself. This one is a different one for everybody all over the world. One thing in Brazil that is different than other crises is the level of interest rates that we have. Brazil, we're going to know tomorrow, but probably interest rates are going to be below 4%. We never had that. In 2008, when we had the subprime crisis, I believe the interest rates were above 14%, something like that.
It's a no-brainer decision to go to fixed income and buy government bonds. Now it is a different situation. Of course, there is a lot of volatility in the market that can impact net inflows and decision from investors how to invest. One thing we are very confident about is that our platform keeps providing a better value propositions for the clients. As I said in the presentation, in times like this, we step in. We go after our clients. We expose ourselves with our financial education DNA, in times of uncertainty, what people need is information, and we have that to provide them.
I believe that looking in a short-term view and most importantly, in a long-term view. We position XP as a player in the market that really is there to help the client for the long term, and that, of course, helps the net inflow as well. It's hard to tell looking forward, because again, nobody knows what's going to happen with this crisis. So far, what I can tell you is based on what we have seen on a daily basis, so far the net inflows, they've been keeping the same pace, except for some large equity custodies. I made this point just so everybody can be aware that we might have a drop in assets under custody because of some small clients, few clients, I mean, with large equity custodies.
That does not mean that will impact our revenue, because those large custodies, they not necessarily contribute to the revenue as other equities and fixed income and other custodies that we have in our platform.
Thank you.
As a reminder, we are now conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please while we poll for questions. There are no further questions at this time, and I would like to pass the call back over to Carlos Lazar for closing comments.
Well, once more, I would like to thank you all for participating in this conference call. For additional questions, please contact our Investor Relations department. Our email address is ir@xpi.com.br. Stay safe, and have a good night. Thank you.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.