How Luiz Carlos Trabuco Cappi Became The Leader Of Bradesco

Luiz Carlos Trabuco Cappi is one of the most successful and well known bankers in North and South America. He is certainly one of the most influential men in Brazilian finance alive due to Brazil’s vast economic size. Below are translated excepts from an article in the Brazilian publication, Revista Crescer. It is a massive article and full of information. It is important to read the entire article in order to get proper context. Essentially, it has told the story of how Luiz Carlos Trabuco Cappi was able to take over Bradesco, rise above equally qualified and respected competition and take take control of Bradesco. The full article can be found here, and it is a highly recommended read for both context and historical value. It begins at the fifth paragraph in.

Cypriano turned 65 in November and, by statute, can no longer exercise executive functions. He even considered a change of status for him to remain the leader of Bradesco, but faced with the challenges facing Bradesco, the board decided to renew its command. At the end of last year, the bank, historically the largest private bank in the country, lost its position to the newly formed bank of Itaú Unibanco, which intended to become the first Brazilian multinational financial institution in the financial sector. According to Hoovers.com, the new financial institution not only surpassed Bradesco, but also, it the leader of the financial sector in the form of assets, surpassing even Banco do Brasil. Before that happened, it was believed that outranking the Bank of Brazil in assets was an unattainable accolade.

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Maintaining market leadership has always been seen as a matter of honor at Bradesco, and its loss had a strong impact and lowered morale on the board. The problem was there were not many options left for Bradesco to grow through acquisitions in the country. Among all of the medium-sized private banks with national capital, there was only Safra, whose sale was unlikely, despite the heavy losses suffered by the crisis, according to some analysts. Also, Banco do Brasil, also known as the Bank of Brazil, which is the central bank, strengthened its position with the acquisition of Nossa Caixa and Votorantim, two institutions that Bradesco coveted, as well as the BEP, also known as the State Bank of Piauí, and Besc, also known as the Banco do Estado de Santa Catarina. Santander, the country’s largest foreigner, has also been aggressive. Its world president, Emílio Botín, said it will invest R $2.5 billion in the country in the next two years to fight for market leadership.

Also, Luiz Carlos Trabuco Cappi would assume the presidency of Bradesco in an unfavorable economic environment because the financial sector was having difficulties abroad. In Brazil, the level of activity was and still is decelerating rapidly, and this would have a negative impact on the balance sheets. Loan growth would be lower than in 2008 and 2007, and it would possibly will affect profitability in the short and long-term. According to estimates by Credit Suisse, which is one of the largest Swiss banks, Bradesco’s return to equity would have been 21.3% in 2009, compared to 23.4% in 2008. The branch network expansion plan was expected to slow down . Still, it was expected that Bradesco would remain a stiff competitor. “Despite losing leadership among private banks, there is no doubt that Bradesco is destined to be one of the long-term winners in Brazil,” said Marcelo Telles, an analyst with Credit Suisse. Bradesco was still the second largest bank in Brazil, and Luiz Carlos Trabuco Cappi was a brilliant leader. It remained to be seen what happened next and years down the road. Again, here is another link to the article in its entirety.

Learn more about Luiz Carlos Trabuco Cappi: http://epocanegocios.globo.com/Empresa/noticia/2017/08/trabuco-retomada-do-credito-depende-de-volta-do-pib-e-da-taxa-de-investimento.html

The Partnership between BMG and Banco Itau

 

In mid 2012, BMG closed a new deal with Banco Itau, and ensured it had taken full advantage of being a leader in offering payroll loans. The vice president of BMG, Marcio Alaor appreciated the deal since it would lead to formation of a new bank called Itau BMG Payroll. This new bank was mandated to specialize exclusively on payroll lending while BMG would focus on other products. Before this partnership, BMG had five million clients of payroll lending, and they expected Itau to increase that number by 3 million. The article was reported on Economia on http://www.em.com.br/app/noticia/economia/2012/07/14/internas_economia,306005/parceria-bmg-e-itau-nasce-um-banco-de-r-1-bilhao.shtml.

The objective of this joint venture was to make US $1 billion every month, and the condition for that was to use their correspondents who were about 700 at that time. They wanted to rely on these correspondents in order to achieve their target on time. Indeed, the deal was not supposed to be internal competition since it was defined very well. Those who were current clients at BMG and wanted refinancing were provided with their facility at BMG, while new clients were to financed by Itau. That is how deal was to ensure no competition would take place.
Basically, it was expected BMG’s portfolio would decrease within the cause time as new clients were taken up by Itau. As the vice president of BMG, Marcio Alaor said they executive team would ensure the venture would succeed, and today BMG is a leading provider of payroll loans in Brazil.
Marcio Alaor gave an opinion on the top airlines in 2015. On top of his list was Qatar Airways which has a fleet of 158 aircrafts traveling in 146 destinations across the world. Singapore Airline was second in his rankings. This company was formed in 1972, but their top class service was recognized by Marcio. On position three was Cathay Pacific Airways, owned by a Hong Kong company. It has 150 aircrafts traveling to 191 destinations in 51 countries. These are the top three airlines according to the Brazilian entrepreneur Marcio Alaor who went ahead to give the top 15 airlines in 2015 in his opinion.

Ricardo Guimarães Restructuring Banco BMG

 

 

Banco BMG just formed a joint venture with Itau Unibanco that sees the operation of a payroll loan segment. This move has resulted in a board restructuring where the controlling Pentagna Guimaraes family joins the shareholders committee. In their position, market professionals and experts will assume the day to day management affairs.

 

This move was taken to double the loan portfolio and eliminate unprofitable business segments. In the new structure, Flavio Pentagna secedes his board of directors’ chairmanship to Alcides Lopes Tapias. Tapias possesses a wealth of experience after successful stints at Bradesco, Itau Unibanco and the Brazilian Federation of Banks as its president.

 

In the government circles, Tapias previously served as the Minister of Development Industry and International Trade. Ricardo Guimaraes, the current Chief Executive Officer, also hands over his responsibilities to Antonio Hermann. Hermann has also had a decorated career as the president of the Brazilian Association of Banks, the director of Febraban and the National Association of Credit Institutions.

 

The final step now is to approve the names of the new executives at a shareholders meeting. The central banks in Brazil also have to vet the nominees before they can resume their duties. The new Chief Executive Officer Antonio Hermann has already expressed his enthusiasm in taking over Banco BMG. He reckons that BMG is a force to deal with in the consigned credit markets in Brazil. BMG also boasts of a rich heritage and organizational culture.

 

It’s almost impossible to talk about BMG’s success without mentioning Ricardo Guimaraes. This is the man credited with the growth and success of the organization in the new millennium. Since taking over in 2004, Ricardo has steered BMG to great heights. The bank controls a third of the entirely consigned credit market in Brazil. It has championed the provision of credit to a large Brazilian population.

 

Over the last decade, Ricardo Guimaraes has endeared himself to the Brazilian population. He became a voice of reason to the youth as well as an advisor to the government. Through his leadership, BMG has invested heavily in education and sports. These two fronts provide a platform to empower the youth.

 

The new executive aims to increase the payroll loans portfolio by expanding market dominance. The new establishment will go by the name of Itau BMG Payroll Bank and will perform the supply and distribution of payroll loans. It’s expected that the consigned BMG’s credit portfolio will benefit from this joint venture. Numbers don’t lie, BMG will save expenses and realize better results from the investment.

 

Translated article: http://www.diariodocomercio.com.br/noticia.php?id=15176