Few banks in the history of Latin America have enjoyed the phenomenal growth that Grupo Bradesco has experienced over the last few decades. Starting as a one-branch thrift operation in the small town of Marilia, Sao Paulo, the bank has grown from a tiny concern into the largest and most important bank in Brazil. This transformation is largely a product of the ingenuity and drive of the employees who have made it great. One of those, Luiz Carlos Trabuco, exemplifies the dedication and hard work that so many have shown in the rise of the bank to the top of the Latin American finance space.
Trabuco has bumpy ride as CEO. But in the end, he is vindicated
Over the course of his nearly 50 year career, Luiz Carlos Trabuco has made more contributions to the firm’s success than many realize. Throughout his time as the head of the bank’s marketing department, he was able to forge strong relationships with local media personalities in every market where the bank operated. This, in conjunction with the widespread sponsorship of local charity events, succeeded in transforming the bank from one with a slightly unsavory image to one of the most highly regarded banks in the state of Sao Paulo.
Trabuco was also instrumental in doing away with the old business model that the bank used of providing equal services to all clients, no matter what their value to the bank was. This resulted in concerted efforts to go after the country’s highest net worth individuals. The move proved to be enormously successful, with the financial planning division going from just a few percent of the bank’s total revenues to nearly 30. At the same time, the influx of high-net-worth clients meant that the bank’s balance sheets were increased by hundreds of millions of dollars, enabling the group to originate more loans.
Trabuco also was a major force in the overhauling of the bank’s insurance underwriting division. While he was there, Bradesco Seguros was able to radically increase the number of insurance policies it underwrote. By the time Trabuco was again promoted, the underwriting arm was the largest provider of retail insurance policies in the country.
In 2009, Trabuco was tapped to become CEO. Over the first 6 years of his tenure, things did not go particularly well. This was the first time in Trabuco’s career that he was forced to face any real adversity. He inherited a bank in a macroeconomic climate where even the best-positioned firm would have found it almost impossible to achieve any organic growth. On top of that, the craze of mergers and acquisitions that had stormed through the Brazilian banking industry throughout the 90s and 2000s had consumed just about every viable acquisition target in the country.
Making matters worse, within a few months of taking over at the helm, Bradesco’s chief rivals, Banco Itau and Unibanco, merged. This instantly pummeled Bradesco back to a distant second place, putting them at the whims of their now much better-heeled competition.
Between 2009 and 2015, Bradesco’s stock price tanked by almost 80 percent. Rumors began swirling that Trabuco himself would soon get the ax if things did not start turning for the better, fast. Then, in early 2015, Trabuco got wind that HSBC was looking to dump all of its Brazilian assets. He moved quickly to secure a deal. By mid-2015 it was announced that Bradesco would acquire HSBC Brazil for $5.2 billion in cash.
The acquisition, which was the largest in Brazilian history, instantly repositioned Bradesco as the leading bank in the country. The stock price rebounded and, today, Trabuco is considered one of the bank’s top CEOs of all time.
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