2018 is a presidential election year in Brazil. The big news is, former president Lulu will still be on the ballot to replace Michel Temer even though the Supreme Court said he has to serve time for his role in using his presidential position from 2003 to 2011 for personal gain. Brazil’s media is following the story closely, but the other big story in Brazil is what’s happening internally at the second largest bank in the country. Lázaro de Mello Brandão, the patriarch of the bank and the oldest banker on record, decided to retire at the end of 2017.
Brandão’s long-time bank associate Luiz Carlos Trabuco took over as chairman while he was still the acting CEO of the bank. The Board of Directors, under the leadership of Brandão, decided to consider one of seven of Bradesco top executives as a replacement for Mr. Trabuco. The search started in November 2017, and it ended in February when the Trabuco told the country Mr. Octavio de Lazari would be the new president and CEO. Lazari is a 40-year bank veteran. He was the president of the bank’s insurance arm, Banco Seguros before he got the big job. Trabuco was also a Seguros president from 2003 to 2009.
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The appointment of Lazari wasn’t a surprise even though the six other candidates had similar banking credentials. Lazari is a focused banker who knows the challenges Bradesco faces in the digital banking market. In 2017, Trabuco was instrumental in establishing Next, a digital bank, so Bradesco could compete with the digital startups that were taking business away from the Itaú and Bradesco as well as the other banks that rule the Brazilian market. Trabuco knew Bradesco had to step up and out of the typical banking box in order to stay relative in this age of Internet shopping and banking. According to folha.uol.com.br, Trabuco and the Board knew Lazari shared the same dream for the bank, so he was the lead contender while the search was in progress.
Now that Lazari got the confirmation needed by the shareholders at the March 12th annual meeting, he hasn’t let any banking grass grow under his feet. Immediately after the confirmation, Mr. Lazari told the press Bradesco would continue to close more bank branches. He also said the bank was ready to offer more loans to qualified current and future customers. Closing bank branches is an expensive undertaking, but Bradesco put money aside to close under-performing branches due to the 2015 acquisition of HSBC’s Brazilian operation. Bradesco inherited 800 HSBC’s branches in that transaction, and many of them were too close to existing Bradesco branches. Trabuco closed about 500 branches before leaving the CEO office. Lazari told the press another 200 branches are on the chopping block in 2018.
The Lulu fiasco will not have an impact on Lazari ability to guide the bank through this election year. Even if by some incredible turn of events Lulu becomes president of Brazil while he is behind bars, Lazari, Trabuco, and the executive team will continue to produce the income shareholders expect in 2018, according to Lázaro de Mello Brandão. The 91-year-old banker has faith in the men he trained during his 75 years in banking.
Find more about Luiz Carlos Trabuco: http://economia.estadao.com.br/noticias/geral,bradesco-anuncia-substituto-de-luiz-trabuco-na-presidencia-do-banco,70002178384