The relationship between banks and the economy can best be described as symbiotic. Under normal conditions, where one is doing well, the other automatically also does well. Equally, when the economy is experiencing some troubles, banks will also experience some troubles. This has been the case in Brazil for the last few years. The largest economy in Latin America experienced a crippling recession in 2015 and has since been struggling to recover.
One bank that has done well to remain strong during this period id Bradesco. Under the guidance of board chairman, Lazaro Brandao, and president, Luiz Carlos Trabuco, the bank has largely remained stable by relying on innovation and prudent management. However, a recent shakeup in the bank’s leadership hierarchy could see the bank perform even better.
After more than seven decades at Bradesco, former board chairman, Lazaro Brandao on 11th October announced his resignation from the position. His leaving the company was not entirely unexpected given the fact that he currently at the ripe age of 91. The current president was befittingly selected to take over as the next chairman.
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In fact, it had long been speculated that Luiz Carlos Trabuco was being groomed to occupy this position, especially given the fact that he was assigned the position of vice chairman of the board three years ago. When announcing his departure from the bank, Brandao spoke highly of Trabuco and expressed the utmost confidence in Trabuco seamlessly being able to assume his role.
As a consequence of Trabuco becoming the next president, the bank now has to select a new president. However, the decision is not expected to be made until March 2018 when the bank holds a shareholder’s meeting. Until then, Luiz Carlos Trabuco will be both president and chairman at the second largest lender in Brazil. This, however, has not stopped many in the industry from speculating who will be selected to be the new president. In line with the bank’s long-held culture, the next president will be selected from among the current crop of senior leadership at Bradesco. In particular, the current vice presidents are speculated to have the highest chance of being named to the position.
The new Bradesco president is expected to operate in an economic climate that is considerably different to that Luiz Carlos Trabuco found when he was named the president in 2009. After a few rocky years, the Brazilian economy is this year starting to experience a resurgent rebound. This is in stark contrast to 2009 when a global financial crisis greatly limited the flexibility of the Brazilian financial sector.
Consequently, Luiz Carlos Trabuco primarily had to rely on organic growth techniques to expand the bank. For the new president, however, there will likely be a number of viable acquisition opportunities in the industry.
Despite the difficult economic climate he has faced throughout his tenure, Luiz Carlos Trabuco has greatly risen above them and significantly grown the brand. Arguably, the greatest testament to Trabuco’s effectiveness as a banking executive is the 2015 HSBC acquisition deal.
The financial industry was that year shocked at the news that British financial conglomerate, HSBC was putting up its Brazilian operation for sale. At that point. HSBC was the fourth largest non-public bank in the country. Under the guidance of Luiz Carlos Trabuco, Bradesco moved quickly to acquire the mid-tier bank. The deal was ultimately valued at $5.2 billion, making it the largest for the year in a receding economy. The shrewdness with which Trabuco went about to negotiate and complete the acquisition got him named the entrepreneur of the year for the finance category by Money magazine.
Find more about Luiz Carlos Trabuco: http://insiders.morningstar.com/trading/executive-profile.action?PersonId=PS00003Y11&flag=Executive&t=XNYS:BBD®ion=usa&culture=en-US&cur=