Luiz Carlos Trabuco has had a roller-coaster tenure at the top of Brazilian banking giant Grupo Bradesco. The 67 year old CEO, who has spent his entire career with the firm, oversaw a tumultuous period in the company’s life, with the stock price, at one point, dipping to just 20 percent of its 2009 high.
But Trabuco was able to counter the bad performance of his first six years with one of the greatest coups in Brazilian business history. In 2015, Trabuco gained national attention when he led the acquisition of HSBC Brazil for $5.2 billion, in an all cash deal. With one master stroke of the pen, Trabuco had put the ailing Bradesco back on top, turning the tables on arch rival Itau Unibanco and repositioning Bradesco as the clear leader in the industry.
Trabuco’s shot clock runs down to zero
One consequence of the successful completion of the HSBC Brazil acquisition was that Trabuco was granted a series of extensions, which allowed him to work past the normal mandatory retirement age of 65. Now 67, Trabuco’s time has run out. Bradesco chairman Lazaro Brandao has announced that he will no longer be renewing Trabuco’s contract extensions. Instead, Brandao, who is, himself, retiring, has said that Trabuco will take his old position as chairman and appoint a replacement at CEO by no later than March of 2018. Although Brandao is approaching 92 years old, the announcement of his departure did not sit well with all investors, some of whom still clearly harbor nervous feelings about Trabuco’s ability to lead.
But Brandao has stated that he has utter confidence in Trabuco’s abilities and character. And these statements are not without reason. Other than Brandao himself, who first joined the bank at the age of just 16 and rose through the ranks through hard work and talent, Trabuco easily ranks as one of the most influential employees of Bradesco in the bank’s history.
As many will freely acknowledge, Trabuco’s performance in his first six years as CEO are largely a product of the macroeconomic and competitive environment that he inherited. It is unlikely that any other CEO could have made better lemonade out of the particular lemons that Trabuco was handed. Some say that Trabuco could have done more to prevent the merger of Itau and Unibanco. But there is little evidence for this assertion.
However, Trabuco arguably accomplished more in his time at Bradesco before assuming the bank’s top spot than he did while CEO. As the president of the marketing department, in the early 80s, Trabuco was responsible for modernizing and streamlining the bank’s marketing and public relations efforts. This paid off handsomely, as Bradesco was attracting clients at rates never before seen by the time Trabuco left the position.
He was then promoted to the head of the firms fledgling financial planning division. There, he grew the unit from relative obscurity into a business line accounting for almost one third of the corporation’s total profits. The unit continues to be a major driver of profits to this day.
Later, Trabuco was again promoted to the head of the bank’s insurance division. There, he was able to more than double the division’s output, allowing it to become the single largest underwriter of retail insurance policies in the country. All of these accomplishments had major and lasting effects on the profitability, growth and business philosophy of the company.
It is by looking at accomplishments like these that it becomes easy to conclude that Trabuco is, as Brandao explicitly put it, the right man for the job. There is little question Trabuco will make an apt chairman.
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