Bradesco CEO Luiz Carlos Trabuco Works Tirelessly To Propel Firm To Number One

 

Many global CEOs are walking stereotypes of greed, with lavish consumption, conspicuous flaunting of wealth and leading generally unseemly lifestyles. They spend profligately, never wasting a 50 mile drive by limousine when the same trip could be made by corporate jet. They own hundreds of suits and their wives even more pairs of shoes. And they often get paid obscene amounts of money whether they perform well or burn their company to the ground. It’s no wonder that so many common folks have such a jaded view of the system.

But not all CEOs are like that. One example of a CEO who does everything to eschew such wastefulness is Luiz Carlos Trabuco, CEO of Brazilian finance conglomerate Bradesco. The 66 year old veteran banker is known by many for his quiet demeanor and lack of pretentiousness. Although he has been paid as much as $12 million per year, he wears discount suits and drives a late-model car. He lives in a modest house and rather than spending his time jetting off to Pacific island resorts and golf trips, he is described by those who know him as a dedicated workaholic, spending as much as 12 hours per day obsessively working to put Bradesco on top of the financial services industry. In short, he is the kind of CEO every shareholder dreams of.

Still, all the low-key leadership and steadfast dedication to the job has not silenced all of Trabuco’s critics. Some claim that he has underperformed, pointing to the stock price, which is still considerably down over its 2008 high, the last year of his predecessor Crypriano’s reign. But it is important to remember that Luiz Carlos Trabuco took over a company in a much more precarious situation than that which Cyrpiano inherited in 1999. The macroeconomic conditions in Brazil had severely declined and the opportunities for further organic growth were looking bleak. If Bradesco was to grow, that growth would need to come in the form of strategic acquisitions. But there were precious few suitable targets left to acquire that hadn’t already been gobbled up by either Bradesco itself or its competitors.

But despite the first six years of his tenure amounting to little, Trabuco was able to pull off one of the biggest coups in Brazilan financial history when he was able to complete the acquisition of HSBC Brazil for $5.2 million in cash. This acquisition dramatically increased the size of Grupo Bradesco, instantly rocketing it to the top of the Brazilian financial industry in a number of different categories. It also positioned Bradesco to start competing head on with its chief rival, Itau Unibanco. If Bradesco, under Trabuco’s leadership, can decisively knock Itau Unibanco off its pedestal, it could mean the eventual ability of Bradesco to begin charging monopoly rents on some of its product lines. This could be a tremendous boon for the company and its shareholders. Although Trabuco vociferously denies this is what he has in mind through his strategy of pursuing aggressive growth, many industry outsiders believe that he is trying to turn his firm into the country’s soft monopoly of banking.

And things are looking up for Trabuco and his company. Almost since he took over, in 2009, the markets had pummeled Bradesco’s stock nearly non-stop. Part of this was the fact that the merger between banking giants Itau and Unibanco initially put Bradesco in a distant second place, making it look like the future of Brazilian banking was to be dominated by the new Itau Unibanco conglomerate. As Trabuco failed to grow the firm or increase profits through 2011, 2012 and then 2013, the stock price slowly declined. By 2015, it had dropped more than 75 percent from its 2008 high.

But the HSBC acquisition blew life into investors’ confidence. Over the last two years, the stock has exploded back, increasing by more than 100 percent. Clearly, the market believes Trabuco’s golden touch is back.