Banco Bradesco, the number two private bank in Brazil, is getting a lot of attention from investors as well as from the press. The move to shake up the executive team at the bank is finally a reality, and the banking world is paying attention to those changes. Ninety-one-year-old Lazaro de Mello Brandão is retiring as Chairman of the Board, and CEO Luiz Carlos Trabuco Cappi is taking his place. Brandão was going to retire in 2016, but the death of insurance executive, Marco Antonio Rossi, the leading candidate for the Trabuco Cappi position, put his retirement on hold. The board raised the CEO retirement age from 65 to 67, so 66-year-old Trabuco could remain in his office until 2019. But 2017 was a banner year for the bank in terms of profit and investor interest, so Lazaro de Mello Brandão thought it was time for him to step down to keep the momentum going, and the bank’s board agreed.
Luiz Carlos Trabuco Cappi will be the bank’s chairman and CEO until March 2018. A new CEO will come from a group of Bradesco executives who have the right qualifications to take over from Trabuco Cappi. The internal CEO search project is underway, and seven Bradesco executives are on the shortlist. The new CEO will emerge 30 days before the bank’s annual shareholders meeting in March.
Lazaro de Mello Brandão is the longest running chairman in the Bank’s history, so Trabuco Cappi has some work to do in that position. Brandão’s banking career began when Bradesco opened its doors 74 years ago. He was a trainee during the early days, but the bank saw something in him that other trainees didn’t have. Luiz Carlos Trabuco Cappi began his banking career in 1969 as a trainee, and he was just like Brandão in some ways. But Trabuco Cappi wasn’t a numbers cruncher or a financial analyst. He was a psychology graduate student and a philosophy major. Trabuco Cappi is a people person and an intuitive bank manager. Luiz knew early in his career that banking was his calling, so he didn’t waste time switching employers. Just like most Bradesco executives, he is a loyal, long-term employee with a lot of management talent.
Luiz Carlos Trabuco Cappi will need those talents while he juggles his time between the CEO and the Chairman of the board position. Bradesco is facing several challenges. The main challenge is at the bank branch level. Bradesco has 5,000 bank branches, and many of those branches are liabilities because of online banking. In order to maintain profit momentum, Bradesco will have to close a lot of branches and service centers and focus on their online presence. Bradesco has more than 26 million clients and a large percentage of those clients now bank online using mobile devices. Trabuco Cappi will continue to help the executive team complete the mission to increase online products and services. Some employees think the new CEO will come from Bradesco’s IT department because of that mission. Executives from other banks think Mauricio Machado de Minas, the head of Bradesco’s IT department will be the next CEO. But Andre Cano, the man who took Rossi’s position at Banco Seguros, has a good chance of getting the job. The other candidates, Josué Augusto Pancini, Domingos Figueiredo Abreu, Octavio de Lazari, Marcelo Noronha, and Alexandre da Silva Glüher are 20-year bank veterans, and they all are capable of handling the CEO job.
The economic recovery in Brazil may give the new CEO a chance to increase the bank’s profitably and reduce loan losses. But the sluggish recovery may put pressure on the Bradesco’s profit margins, according to Morningstar Equity Research analysts.
Learn more about Luiz Carlos Trabuco Cappi: https://g1.globo.com/economia/negocios/noticia/sucessao-no-conselho-do-bradesco-foi-um-ato-planejado-diz-trabuco.ghtml