Luiz Carlos Trabuco’s Bumpy Ride As CEO Was Largely A Product Of Circumstance

Prior to his phenomenal coup de grace, the acquisition of HSBC Brazil, against arch rival Itau Unibanco, long-time Bradesco CEO Luiz Carlos Trabuco had fallen out of favor with both shareholders and the business press, as the firm lost ground to its competitors and the stock price slid to just 20 percent of its all time highs. But the poor performance of the early period in Trabuco’s rein was largely not of his making.

The CEO had inherited a bank that had maxed out its potential under its current structure. There was also the larger macroeconomic picture that he was forced to contend with. Brazil was in the grips of one of the worst recessions in its history, a fact that did nothing to help a major player in the banking sector.

A troublesome inheritance

Taking the reins from his predecessor, Mario Cypriano, in 2009, Luiz Carlos Trabuco seemed to ascend to the highest office at Grupo Bradesco just at the right time. The veteran banker took over at a time when the company’s stock was breaking record highs almost daily. Under Cypriano alone, the company had increased its market capitalization by more than 100 fold, an incredible feat that took less than ten years.

But as many analysts now freely acknowledge, everything was not as good as it seemed. As Trabuco took over, Brazil was just beginning to feel the terrible effects of the 2008 Brazilian economic downturn. The international ripples of the 2008 financial crises would ultimately be felt in Brazil more forcefully than just about any other country on Earth. In fact, by 2017, Brazil has still not completely recovered from the economic woes that started with the collapse of the U.S. housing market. This broad downturn in the economy was particularly bad for the banking sector, which has been traditionally quite sensitive to disruptions in the larger economy.

Read more on Next Bradesco president to leave the bank’s board of directors, Says Trabuco

In addition to the macroeconomic problems that Trabuco was facing when he took office, shortly after he became CEO, arch rival banks Banco Itau and Unibanco merged. This instantly knocked Bradesco, which had been the number-one bank in Brazil under a number of measures, bank to a distant second place. While this would be bad news for any leading company in any industry, in a commodity industry like banking, it becomes highly problematic, especially where there is weak regulation and anti-monopoly controls.

Itau Unibanco, the newly formed merged entity, immediately began using its economies of scale and its market position to undercut Bradesco. The rival bank was able to start making serious incursions into Bradesco’s market strongholds, sending the stock price steadily lower. By the end of 2014, Bradesco’s stock had lost nearly 80 percent of its value. Investors were growing impatient with Trabuco and his overall strategic vision. There were rumors that his ouster was in the making.

But then, in 2015, Trabuco as president pulled off one of the biggest coups in the history of Brazilian finance. When HSBC, the second largest global banking conglomerate, began putting word out that it was seeking to dump all of its Brazilian assets, Trabuco moved quickly and certainly. How Trabuco pulled the deal off is anyone’s guess. But many insiders say that Trabuco pulled no punches in getting it done.

As observers watched stunned from the sidelines, Trabuco was able to raise the capital for the $5.2 billion deal, pulling off the largest acquisition in Brazilian history, right under the nose of Itau Unibanco. The latter was never even in serious contention to make a bid for HSBC Brazil’s assets.

Most believe that Trabuco alone was the only one who could have gotten such a deal done.

Learn more about Luiz Carlos Trabuco: https://g1.globo.com/economia/negocios/noticia/sucessao-no-conselho-do-bradesco-foi-um-ato-planejado-diz-trabuco.ghtml

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Banco Bradesco’s CEO Luiz Carlos Trabuco Gives Social And Educational Programs Priority

Banco Bradesco is a big bank in Brazil. In the first quarter of 2017, Bradesco had a record-breaking net profit of R$9.3 billion. The shareholders are happy, and foreign investors are coming back to take advantage of the opportunities that exist in Brazil. Brazil is a BRICS nation, and the country has one of the world’s richest deposits of natural resources. But a devastating recession was not kind in the largest country in Latin America over the last four years. Unemployment, inflation, political corruption, and high-interest rates hurt Brazilians and many of them live well below the poverty line. But Bradesco and the other banks managed to make money during the recession years. The insurance policies, government bonds, and bank investments gave most banks a healthy bottom line in spite of the economic conditions.

The Board of Directors of Banco Bradesco give their CEO Luiz Carlos Trabuco high marks for his contributions to the bank. Luiz is a 40-year veteran of the Brazilian banking industry. His banking career began in a small Brazilian town, so he is familiar with the trials and tribulations that his clients face every day. The 57-year-old Luiz Carlos Trabuco knows what it takes to make the bank money, and he also knows what his clients want from Bradesco. They want convenient banking hours, lots of ATM locations, and better interest rates. So Trabuco gives his customers what they want. Bradesco has 3,900 service points across the country, and there are more than 900 ATMs in bank branches, plus interest rates are coming down. The bank employs more than 100,000 people, and all of those people receive customer service training, thanks to the employee programs the bank has in place.

CEO Luiz Carlos Trabuco has a lot to smile about these days. But Trabuco is always smiling during his long work days. Bradesco is the second largest private bank in the country. But the recent addition of an HSBC subsidiary puts the bank in striking distance of Banco Itaú for the number one position. Trabuco has a grassroots approach to banking, and that approach is paying off. Luiz supports the social and environmental programs the bank offers the people of Brazil. Trabuco believes in giving back to the communities, so Bradesco bank branches support the local economies through various bank initiatives. And Trabuco also supports several national programs like the Carbon Disclosure Program, the Brazilian Green House Emissions Program, Companies for Climate Change, and Global Compact. For the last six decades, Bradesco has given students a chance to do better and feel better about the future through the bank’s educational program.

Bradesco is large enough and has enough assets, to coast through the banking world, but that’s not Trabuco’s style. Luiz knows how to get things done without creating a lot of turmoil in the process. His degree in philosophy from the University of São Paulo, and the fact that Luiz has the knowledge and the experience to make the right decisions gives him a solid grasp of the issues facing his bank and the banking industry. Trabuco knows how to manage people. When he was vice-president of Bradesco Seguros, the insurance arm of the bank, Trabuco was able to turn that division into a major profit center for the bank. The 2017 first quarter results prove Trabuco is doing the same thing on a larger scale as the CEO of all bank divisions.

There’s more to say and more to learn about Luiz Carlos Trabuco’s management abilities. Luiz is the type of person that focuses on the positive, and he faces challenges with confidence and resolve.

Find more about Luiz Carlos Trabuco: http://fotos.estadao.com.br/galerias/cultura,luiz-carlos-trabuco-cappi-e-lucilia-diniz-ofereceram-jantar-em-torno-do-prefeito-joao-doria-e-sua-mulher-bia-nos-jardins,30901

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