Today, the Brazilian banking industry is completely dominated by two major players. These are the conglomerate of Itau Unibanco, formed by the merger of those two banks and Bradesco, a bank that experienced one of the most stunning periods of growth in Latin American history.
Luiz Carlos Trabuco is the CEO of Bradesco. As a career banker who has been with his firm since the age of 18, the 66 year old banker is widely acknowledged to be one of the most experienced and expert people the industry currently has. But since taking over the helm of the giant bank in 2009, things have not all gone according to plan.
For the first six years of his tenure, Trabuco struggled against an unfavorable macroeconomic backdrop and a rapidly falling stock price. At the low point, in 2013, the stock had fallen by nearly 50 percent from its high in 2009. This marked a low point for Trabuco, as calls for his resignation began being heard, in muffled tones, throughout the Brazilian financial press. But then, in 2015, he pulled off a major coup. The inveterate banker acquired HSBC Brazil, in full, for an all-cash deal of $5.2 billion, the largest single transaction in Brazilian history.
This instantly rocketed Bradesco, which had fallen to a distant second-place in the Brazilian banking sector, back to a solid number-one position in many different categories. Bradesco, now with over $400 billion in assets, $50 billion in revenues and more checking account holders, assets under active management and loans outstanding than any bank in the country, is a major player on the national scene. While Itau Unibanco is far from being down for the count, many experts point to the deal as evidence that Trabuco’s skill, leadership and unsurpassed knowledge of the banking industry is beginning to manifest in a slowly emerging decisive advantage for Bradesco. This, many say, could eventually lead to the bank becoming a soft monopoly on the country’s banking market.
What is Trabuco’s real strategy?
While Trabuco himself, an expert marketer who proved himself over eight years of running the company’s highly successful marketing department, is quick to issue standard corporate boilerplate about creating a good customer experience and adding value to the community being the firm’s only and singular goal, many industry observers are unconvinced this is his true intention.
Trabuco’s career has been nothing, if not a tour de force in a nearly monomaniacal drive to create sustained and competition-smashing growth in every business unit that he has ruled over. During his time in the company’s financial planning division, Trabuco grew the unit from an insignificant part of the business into a business line accounting for more than 25 percent of the firm’s total profits. By the time he was done, Bradesco’s financial planning arm was the most important such business in the country.
He repeated this feat as head of the company’s insurance department. Between 2003 and 2009, Trabuco grew Bradesco Seguros in the largest underwriter of retail insurance policies in the country, again establishing a virtual monopoly over certain areas of insurance underwriting. His formidable talents for creating explosive growth seem to be conjured at will, as he has taken these units from virtual write-offs to major winners.
The question now remains as to whether or not Trabuco will be able to repeat these performances with the company as a whole. While his first six years were bitterly disappointing to many, Trabuco has shown he’s still in the fight, and throwing hard punches, with the acquisition of HSBC Brazil.
Only the future can tell what’s in store for Bradesco. But betting on Trabuco never seems like a bad idea.
For more information about Luiz Carlos Trabuco: http://www.istoedinheiro.com.br/noticias/negocios/20151218/luiz-carlos-trabuco-cappi-empreendedor-ano-nas-financas-2015/327856