Jan 7 (Reuters) - Brazilian brokerage XP Inc said on Friday it would buy a stake of up to a 100% in investment platform Banco Modal S.A., which is backed by Credit Suisse, valuing it at $528.5 million in an all-share deal.

The proposed deal amount offers a premium of roughly 50% over Modal's last share price on Thursday. XP will issue up to 19.5 million shares to give Modal's shareholders as payment.

Both firms will have 3.8 million clients and net revenue of 11.8 billion reais ($2.07 billion), XP said in a filing, adding there was immaterial overlap between both companies' clients.

"Brazil has one of the most concentrated financial sectors globally and together we'll be able to be even more competitive against the traditional banks," XP Chief Executive Thiago Maffra said in a filing.

In a note to clients, Guide's analysts said the deal is positive for XP as it will increase the brokerage's market share. Modal had 30.4 billion reais under custody in September, versus XP's 789 billion reais.

Modal, whose shares were up 44% in the morning trading, will remain an independent company and its shareholders will hold a 3.49% stake in its acquirer. XP's Brazilian Depositary Receipts were up 0.81%.

The move comes as shares in XP and Modal fell last year, due to fierce competition among fintechs and brick-and-mortar banks. Brazil's central bank recent aggressive hikes in the benchmark interest rate also pose a challenge to brokers' inflow of money.

Shares in Modal were priced at 20 reais each in an initial public offering in April last year and closed Thursday's trading session at 8.35 reais. XP's shares fell roughly 29% in the last 12 months, ending at $27.09.

Modal will bring to XP some 500,000 active brokerage clients and more expertise in banking, an area in which XP plans to expand.

If Modal's minority shareholders do not approve the deal, XP said it will acquire controlling shareholders' 55.7% stake and offer to buy out any willing minority holders.

Credit Suisse, which has a 15.8% stake in Modal and distributes its wealth management products through the broker, said in a statement that the deal will offer it an opportunity to serve more clients.

($1 = 5.6883 reais) (Reporting by Carolina Mandl in Sao Paulo and Niket Nishant in Bengaluru Editing by Vinay Dwivedi, David Evans and Nick Zieminski)