Bradesco has become Brazil’s largest banking concern across a number of crucial metrics. It has more money on deposit, more branches, more client funds under management and more active loans than any other bank in Brazil. In total assets, it’s just a hair behind its largest competitor, Itau Unibanco, at over $400 billion. However, Bradesco has not made great progress over the last 8 years, at least not measured by its stock price, which has roughly stagnated. However, Trabuco has accomplished one great feat at his time at the helm of Bradesco. He completed the 2015 acquisition of HSBC Brazil, a move that instantly rocketed Bradesco to the number one spot, by many measures, among Brazilian banking institutions.
A man and an organization rise in tandem
With Bradesco now occupying the top slot in many areas of Brazilian finance, it is worth remembering that the institution had the most humble beginnings. Founded in 1943, in the city of Marilia, Bradesco began life as a company with just a couple of branches. It slowly underwent growth over the next decade. By 1959, the year in which Luiz Carlos Trabuco began working at the firm, it had grown into a small, regional presence, with a few offices across the city of Marilia.
Trabuco’s incredible career was charted in almost perfect tandem with the rise of Bradesco itself to a position of prominence. In fact, Trabuco himself played a key role in the firm’s success, but that would not be for many years to come. Between the 1960s and 1980s, Trabuco slowly rose through the ranks. He was quickly spotted as someone with a aptitude for learning new positions as well as being a natural leader. By the late 1980s, he was heading a large department within the bank. Then, in 1992, he finally received his first chance at a genuine executive role.
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In that year, Trabuco was tapped to head up the firm’s small but growing financial planning division. As Brazil had become an economically dynamic country with many first-world characteristics, it had a growing population of middle and upper-class citizens with the need for long-term retirement and investment planning. Trabuco recognized the opportunity and quickly began implementing services and products that would have been competitive anywhere in the world but which were all but unheard of in Brazil at that time. Over the next 11 years, Trabuco grew the financial planning business from a relatively minor part of Bradesco’s business into a unit that accounted for more than 25 percent of the corporation’s annual profits. This stellar performance did not go unnoticed by higher-ups. In 2003, Trabuco was tapped to head the company’s large insurance division.
He had similarly good results as president of Bradesco Seguros. While heading the department, Trabuco grew revenues to over 30 percent of the total of the firm. In the process, the business line became the largest underwriter of retail insurance policies in the country. In 2009, when outgoing CEO Mario Cypriano was due to step down, Trabuco was the obvious choice for replacement.
But unlike his other executive roles, Trabuco found himself surrounding by an environment where no low-hanging fruit remained. The spectacular growth of the firm that was experienced under Cypriano’s leadership had largely sputtered out. Amid a stagnant Brazilian economy, organic growth seemed an unlikely source of ongoing, expanded profits. Trabuco knew that he needed to pursue acquisitions to realize significant growth, but there were none to be had.
Then, in 2015, HSBC began to put word out on the street that they were looking to dump their Brazilian operations. Trabuco pounced, quickly making an all-cash offer of $5.2 billion dollars. By late 2015, the deal had been closed, and Bradesco had been put back on top as the country’s most significant financial firm.
However, organic growth has been more elusive. Without organic growth, Bradesco will still be vulnerable to competition. Whether Trabuco will be able to find sources of organic growth will be something that only time can tell.
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