Luiz Carlos Trabuco has been the acting CEO of Grupo Bradesco over the last nine years. In that time, the bank has grown into one of the largest and most important financial institutions in all of Latin America. With more than $400 billion in assets and $50 billion in annual revenues, no other private bank in Brazil can match the sheer size and volume of business that defines Bradesco.
Under Trabuco’s watch, the bank was able to expand to an extent that is unprecedented among Brazilian financial companies. The bank now counts more than 5,000 branches under its name, and it currently employs more than 100,000 people, making it one of the largest employers in Latin America.
But this result was far from guaranteed. Throughout Trabuco’s tenure as CEO, the bank faced some of the most critical challenges to its business that it has ever experienced. These included the rapid contraction of the Brazilian economy after the 2008 financial crisis, which effected the Brazilian economy more negatively than elsewhere throughout the hemisphere. Making matters worse, shortly after Trabuco Bradesco assumed the role of CEO, Bradesco’s chief rivals, Banco Itau and Unibanco, merged, forming the largest banking conglomerate in the country and sending Bradesco back to a distant second place.
This was bad news for the bank, which was operating in an increasingly consolidated banking market. The newly formed Itau Unibanco quickly began using its vast economies of scale and pricing advantages to undermine Bradesco across all of its principal markets. By 2014, Bradesco was in bad shape. As a result of competitive pressures and an inability to get a clear advantage over its larger rival, the company’s stock had slipped nearly 80 percent from its all-time highs of the late 2000s.
Trabuco knew that something had to be done. Because banking is largely a commodity business, there were few ways for a bank in Bradesco’s position to compete purely on the merits of its products. This was the crux of the problem: By gaining significant size advantages over Bradesco, Itau Unibanco could offer better rates and lower fees across most of its banking products. This left Bradesco with very little wiggle room to eek out a competitive edge. The bank was losing customers fast.
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But then in 2015, Trabuco began hearing rumors that HSBC was tiring of running its money-losing operations in the hyper-competitive Brazilian banking market. The global banking giant had been attempting to carve out a piece of the Brazilian finance pie for more than a decade, without anything but losses and consumption of valuable human capital to show for it.
Trabuco knew that, with the right offer, he would be very likely to get HSBC to sell all of its Brazilian assets to Bradesco. This would vastly increase the size of Bradesco, putting it back squarely in the driver’s seat of the Brazilian banking sector.
Over the early part of 2015, Trabuco quietly contacted executives at HSBC, drafting a letter of intent and arranging exclusivity on any potential purchase. By the summer of 2015, Trabuco had announced that Bradesco was finalizing the purchase of HSBC Brazil for approximately $5.2 billion in cash. This would mark the largest transaction in Brazilian business history, making Bradesco the country’s number-one bank again.
The deal closed at the end of 2015. This huge upset in the country’s banking sector earned Trabuco the 2015 Isto E Dinheiro Entrepreneur of the Year Award, giving Trabuco his first real taste of nationwide fame and prominence.
Today, Bradesco is back trading at near all-time highs. Trabuco is now slated to step down from CEO and assume the bank’s chairmanship, a role in which it is almost certain that he will excel.
Learn more about Luiz Carlos Trabuco: https://g1.globo.com/economia/noticia/conselho-do-bradesco-escolhe-octavio-de-lazari-junior-para-substituir-trabuco-como-ceo.ghtml