Few businessmen in Brazil or anywhere else today have the kind of inspirational, Horatio Alger story that Luiz Carlos Trabuco can tell of his rise to the top. Starting from the lowliest job title in his company, he literally worked his way from the absolute bottom to the absolute top of a major banking conglomerate that employs tens of thousands of people. Such stories are so rare that when one comes along, it easily captures the imagination of the public.
But even through Luiz Carlos Trabuco was able to engineer his own ascent through the ranks of one of the largest corporations in Brazil, becoming number one in the process, it has yet to be seen if he can or will be able to accomplish the same feat with the corporation that he now leads. Grupo Bradesco has seen its stock price stagnate since Trabuco took over in 2009. And even though the macro economic situation in the country, particularly the stagnant banking industry, is out of the control of Trabuco, there is a great deal that hinges on whether Trabuco will be able to lead the company to become the decisive leader in Brazilian banking or whether it has already reached its apogee and will soon begin a long decline.
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Luiz Carlos Trabuco got his first job when he was just 18 years old in 1959. He was hired at what was then a small, local bank with just a few branches in the small town of Marilia. But he quickly showed aptitude at his job and showed signs of leadership ability. By the late 1960s, he was a branch manager and by the late 1980s, he was a regional manager for what was now a major player in the Brazilian financial space.
In 1992, Trabuco was given his first shot at a genuine executive role. He was appointed president of the firm’s burgeoning financial planning division, a role that he would quickly fill with aplomb. At the time of his appointment, the financial planning division was a small business line, only accounting for a couple percent of the firm’s total revenues. But Trabuco saw big promise in a field that he knew was rapidly becoming a major earner for similar institutions in North America and elsewhere. Concentrating on marketing services to Brazil’s rapidly expanding middle and upper class, Trabuco grew the division into a major source of profits, accounting for more than 25 percent of the company’s total profits by 2003.
In that year, the head of Bradesco’s insurance division was slated to step aside. Again, Trabuco more than double the division’s business volume, being quickly noticed by his higher-ups. This led directly to his promotion to president in 2009.
But as CEO, Trabuco faced steep challenges that he had never before experienced in his career. He inherited a bank that had largely run through all of the legitimate organic growth opportunities that there were in Brazil. The country’s economy was stagnating and there were few new clients to sign up for banking services or financial planning. The only real chance at achieving big growth would be through the use of strategic acquisitions.
After 6 years of somewhat lackluster results, Trabuco became aware that HSBC Brazil was looking to dump all of its assets in the country. He quickly put together an offer of $5.2 billion in cash to purchase the global banking giant’s Brazilian subsidiary in full. The offer was accepted and the deal was closed by the end of 2015.
Many counted this as a major coup for Trabuco and Bradesco as a whole. But others warned that it only amounted to paper growth, not the kind of lasting advantage that comes from offering customers a product with real differentiation. Regardless, Trabuco has turned Bradesco, with one deal, into the most important financial conglomerate in Brazil. And being the effective monopoly in a multi-billion-dollar market is a big prize indeed.