Grupo Bradesco is currently the largest private bank in Brazil by certain commonly used measures. But it hasn’t always been this way. In fact, Bradesco has undergone some of the most spectacular growth of any company in the history of Brazilian business. Between 1990 and 2009, the bank increased its market capitalization by a factor of more than 300 times. This incredible run was followed, however, by a major loss in share price.
But the bank’s current CEO, Luiz Carlos Trabuco Cappi, was able to pull the firm out of its financial nose-dive, taking it to new heights and solidifying a position of almost total command over the Brazilian retail banking industry.
Getting in the market at the peak
Trabuco Cappi had spent his entire 40-year career with Bradesco. First coming to work for the firm in 1969, the then-18-year-old quickly proved himself as a capable employee and fast study. He moved up through the ranks, reaching middle management by the end of the 1970s.
Over the course of the 80s, 90s and 2000s, Trabuco Cappi established himself as one of the firm’s rising stars. Everything he touched seemed to turn to greenbacks. He parlayed one executive appointment into another, each time outdoing his last incredible feats of business building.
Read more: O Bradesco, de Brandão a Trabuco
Trabuco Cappi may have been familiar with the phrase that Warren Buffett has often been heard saying. Buffett has stated that when a great CEO gets involved with a bad business, the only one whose reputation is likely to be left intact is that of the failing company.
While Bradesco had, by all accounts, been a great business for many years, Trabuco Cappi probably could not have known that he jumped into the driver’s seat just as the foundation of the bank’s success was being pulled out from under it. When Trabuco Cappi took over in early 2009, the bank’s fortunes were at their height. But the 2009 global financial crisis would soon put a stranglehold on the Brazilian economy, throwing Bradesco into a spiral of unprofitability and inability to grow.
Things were worsened by the mid-2009 merger between the bank’s chief rivals, Banco Itau and Unibanco, creating the largest bank in Brazil and pushing Bradesco back to a distant second-place, in one of the most competitive banking markets in the world.
Over the next 6 years, Trabuco Cappi continued presiding over the bank’s sliding position but was unable to do anything significant about it. By the start of 2015, Bradesco was trading at less than 20 percent of its 2009 highs. There was talk that Trabuco Cappi was at risk of being let go. And the future of the bank was looking grim.
But then, in 2009, Luiz Carlos Trabuco Cappi got wind of a potential acquisition deal. HSBC, one of the largest banks in the world, had decided that it wanted to divest its Brazilian assets. Trabuco Cappi immediately moved to contact the HSBC leadership, showing early and strong interest in making the acquisition.
In the middle of 2015, Trabuco Cappi announced that Bradesco would be acquiring HSBC Brazil and all of its assets for a total of $5.2 billion in cash. This marked the largest deal in Brazilian business history. And it sent Bradesco rocketing back to the top of the Brazilian banking industry. The company was suddenly back in the power position among its competitors, with the economies of scale, branch numbers and total assets to push its rivals around at will.
The bank’s stock price charged back. Today, it is trading at near all-time highs again. Trabuco Cappi’s reign has largely been considered a success.
Find more about Luiz Carlos Trabuco Cappi: https://www.brasil247.com/pt/247/economia/321809/Trabuco-assumirá-presidência-do-conselho-do-Bradesco.htm