There are few corporate success stories in Brazil as compelling as both those of Bradesco and its CEO, Luiz Carlos Trabuco Cappi. Both man and company rose in lock step with each other, from the obscurity of a small town in Central Sao Paolo the the upper echelons of the global financial world. But now that Bradesco, by some measures, the largest financial institution in Brazil, is run by Trabuco Cappi, questions remain as to how the expert banker will be able to fill the formidable shoes of his predecessor.
A meteoric rise
In 2009, Trabuco Cappi inherited a company that was at its zenith when he was appointed CEO. The former CEO, Mario Cypriano, had succeeded at growing the company faster than any other financial institution in the country. He had grown the bank from a relatively modest concern of just $5 billion in assets to well over $100 billion in just under a decade. During that time, the stock price had increased by a jaw-dropping 200 percent, and the bank had successfully grown all of its product lines, both organically and through the use of strategic acquisitions. By 2009, Bradesco was the second largest bank in Brazil, just behind its main rival Itau Unibanco.
However, just as Luiz Carlos Trabuco Cappi took the reins, things were beginning to change in the Brazilian financial space and not for the better. The country’s economy entered into a slump, and it seemed that additional organic growth in banking, insurance and financial services would be difficult to come by. At the same time, the consolidation craze that had swept the country’s banking industry over the 2000s was petering out, not for lack of appetite for acquisitions but because there simply were no suitable targeted left that had not already been acquired. All of this promised to present major barriers to Bradesco’s continued growth into the future.
Even amid relatively low expectations, Trabuco Cappi’s tenure proved to be a bit of a disappointment, at least for the first 6 years. While the bank held its own amid a hyper-competitive environment, there were no gains in the stock price and many of Trabuco Cappi’s own stated goals failed to materialize. It looked as if the reign of the man that many experts had heralded as the most experienced and knowledgeable banker ever to operate in the country would turn out to be a bust.
But then, in 2015, rumors started to fly that HSBC Brazil, one of the largest financial holding companies in the country, was seeking to divest all of its assets. The firm had been experiencing losses, year over year, for enough time that it was ready to throw in the towel. It no longer wished to dedicate valuable managerial talent and commit resources to operating in the tough Brazilian market. Trabuco Cappi began talks with its management.
By the end of 2015, it became clear that Bradesco would purchase HSBC outright for $5.2 billion in cash, the single largest business transaction in the history of Brazil. The deal closed, making Trabuco Cappi the talk of the Brazilian financial press. He was awarded the Isto E Dinheiro 2015 Entrepreneur of the Year award and was widely lauded for his skill in spotting and completing the deal. All told, the deal boosted Bradesco’s total assets to more than $400 billion, making it the second largest bank in the country in terms of assets. For the first time, the bank also became the largest in Brazil when measured by account holders, funds under management and loans extended. The deal was widely considered a coup for Bradesco.
But the real prize in all of this may be the fact that Bradesco is now positioned to take a decisive lead in the Brazilian financial sector. Whether or not Trabuco Cappi will be able to capitalize on this new found position of strength has yet to be seen. But his track record is promising.