The Brazilian banking sector is one of the most competitive in the world. It’s no surprise, then, that it has spawned some hard-charging and dedicated leaders, men who are willing to dedicate their lives to making the Brazilian economy into a global competitor.
One example of such a personality is the head of the country’s second largest bank, Bradesco. Luiz Carlos Trabuco Cappi has been CEO of Grupo Bradesco since 2009. The 65 year old is not your typical CEO. Although he makes $12,000,000 per year, he eschews all flashiness and ostentatious displays of wealth, opting to drive a late model sedan and dress in modest suits. Those who know him say that, with Trabuco Cappi, it has never been about the money. His competitive drive is largely about being the best, in whatever it is that he is focusing on at the time.
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And Luiz Carlos Trabuco Cappi has stated unequivocally that he seeks to make Bradesco into the best bank there is in Brazil. Since taking over in 2009, he has vowed to make growth, both organic and through acquisitions, a top priority. Trabuco Cappi had a tough role to fill. His predecessor, CEO Mario Cypriano, had managed to grow the firm fantastically during his ten-year reign at the helm. Between 1999 and 2009, Cypriano oversaw the firm balloon from just $5 billion in total assets to well over $100 million. He also presided over an increase in the firm’s stock price of more than 200 times, an amount that shocked even the most optimistic analysts. Most observers noted that the likelihood of Trabuco Cappi being able to keep up anything even remotely resembling this fevered pace of growth was extremely low. However, Trabuco Cappi immediately made it clear that he intended to try,
But what he didn’t realize at the time is the extent to which things had changed at the macro level. Brazil was particularly hard-hit by the global financial crisis. It’s economy entered into a period of stagnation and decline that it still has not fully snapped out of. This meant that all of the organic growth, experienced in the banks retail banking, financial planning and insurance divisions, was impossible to replicate further. By this time, almost all viable acquisition prospects had also been gobbled up by either Bradesco or its main rival, Itau Unibanco. This made achieving any kind of real growth a serious challenge for Trabuco Cappi.
During his first six years of occupying the top slot at Bradesco, the firm posted lackluster results. The stock price went flat, and the firm was unable to grow. Trabuco Cappi looked everywhere for viable prospects for acquisition but came up empty-handed. Then, he caught a lucky break.
In 2015, word hit the street that HSBC Brazil, a unit of the second largest bank in the world, had been losing money for a number of years, and it’s parent company wanted to divest itself of its Brazilian assets. This was music to Trabuco Cappi’s ears. He quickly sprang into action. By mid-2015, he had fully drafted a proposal for the sale of the firm to Bradesco, in an all-cash deal worth $5.2 billion. Not seeing any better offers, HSBC quickly accepted. The deal, the largest in Brazilian history, was closed in late 2015. It was widely considered a major coup for Bradesco.
The deal made Trabuco Cappi a star in the country’s financial press. He received the 2015 Isto E Dinheiro Entrepreneur of the Year Award, and he was roundly lauded for completing the huge deal in a tough banking environment.
Whether or not he will be able to fully capitalize on the newly favorable strategic position that the purchase of HSBC Brazil puts Bradesco in is a question that only the future will tell. But Trabuco Cappi has a long record of success, and this time around looks no different.
Learn more about Luiz Carlos Trabuco Cappi: https://www.youtube.com/watch?v=3xDktJglYEQ