Brazil is digging out of a brutal recession. The second largest country in South America has an unemployment rate of over 12 percent, and high inflation is hurting the middle class. The government is still struggling with ethical issues, and President Michel Temer is trying to push his agenda through Congress as fast as he can. And Former Presidents Lulu and Rousseff are still trying to get their political team back in the game. But in spite of all the controversy and economic challenges, the banks in Brazil are making money; a lot of money.
Bradesco is the second largest private bank in the country, and if the bank continues performing the way it is, foreign investors will have a very good year. According to bank executives, Bradesco’s stock hit $11.32 a share recently, and that put a smile on the face of CEO Luíz Carlos Trabuco, and his executive team.
Bradesco has always been a profitable bank. The bank is one of Brazil’s success stories, thanks to the executive team and some smart investments. Even though the country couldn’t get their economic motor in gear for the last two years, Bradesco and the other top banks have. In fact, Bradesco’s Board of directors didn’t flinch when the team decided to bring the Brazilian division of HSBC into the bank’s family in 2015. Bradesco now has more than 5,000 branch offices and thousands of ATM stations all over the country. The bank is running like a fine-tuned money making machine, so the Board of Directors recently put a special dividend on the table and it will be paid in October. Mr. Trabuco is not the kind of executive who would take the credit for the bank’s success, but according to the board and the employees, Trabuco has put the bank in a very good position.
The Luíz Carlos Trabuco story is one of those incredible adventures of doing the right thing at the right time. Mr. Trabuco is not an accountant, and he doesn’t have a financial degree, but he is a people person who is not afraid to say what’s on his mind. Luíz graduated from the University of Sao Paulo with a degree in philosophy. Trabuco didn’t pursue a career in that field. He decided to go to work for Bradesco in 1969 as a regular bank employee. He is a fast learner and a good judge of character, so the bank gave him the title of director in 1984. And a couple of years later he became a vice-president. In 2003, the bank sent him to the insurance division, and that’s where Trabuco hit his stride as a banker and executive. By 2008, the insurance division, Banco Seguros, was responsible for 30 percent of the yearly bank profits. At the end of 2008, the Board of Directors gave Trabuco the title of president of Bradesco.
Goldman Sachs believes in Trabuco and his team. The investment bank just gave the Bradesco a new rating. The rating went from “neutral” to “buy,” and that’s a big deal. Foreign investors are regaining confidence in Bradesco’s ability to continue its profitable performance. Sixty-six-year-old Trabuco has a lot to do with the bank’s 12-month performance figures. Bradesco’s 12-month, $24 billion revenue posting not only has Goldman Sachs excited, but other investment banks are also getting on the Bradesco stock bandwagon.
The road to the top of the banking food chain has a lot of bumps and potholes, but Luíz Carlos Trabuco manages to steer clear of those financial potholes and make money. No one is sure if Trabuco will stay around for another five years, but no one will complain if he does.