Luiz Carlos Trabuco and his Successful Takeover of HSBC Brazil

Banks are an integral part of our modern day society, holding, transferring, and collecting money for any legal reason imaginable. Many financial institutions are more than banks, offering insurance and other services in addition to basic monetary functions.

Banco Bradesco is one of the latter, colloquially called “do-it-all” banks. Led by Luiz Carlos Trabuco, only its fourth President in over 73 years of operation since it was founded by Amador Aguiar in Marília, São Paulo, Brazil, coincidentally enough being Mr. Trabuco’s place of birth and childhood residency.

Thriving in today’s highly competitive financial marketplace requires reaching and maintaining large sizes to obtain the competitive advantages that the largest banks do, able to extend loans or order new paper currency at prices lower than market value. Bradesco, Brazil’s number two bank in size, is no exception to this rule, recently having picked up HSBC Holdings’ Brazilian branch, titled HSBC Brazil, for a truly astounding $5.2 billion in 2016.

Luiz Carlos Trabuco came up with an idea to purchase HSBC Brazil’s assets related to banking sometime in late 2014, although only toying with the idea for several months. That following summer, in the “dog days” of 2015, Mr. Trabuco pitched his plan to his fellow executives and his technically higher-up Board of Directors, all of whom agreed t the potential purchase.

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Itaú Unibanco, the largest banking organization in the entirety of Brazil, earned its number one ranking in 2008, after merging previously separate banks Banc Itaú and Unibanco. With this fact of Brazil’s modern industry ringing true in the minds of every single financial institution other than the aforementioned, artificially inflated bank, Luiz Carlos Trabuco realized it was of utmost importance for Bradesco, the organization he’d served for over 45 years and tumbled through all of its ups and downs in the past 6 decades, to make use of its working capital by purchasing the rights to another financial institution, if at all possible.

Something else that contributed to the transaction taking place was the well-known fact that HSBC Brazil and every single one of its locations had suffered decreases in money held belonging to customers, total daily traffic averages, and other relevant performance metrics. Believe it or not, most branches cost more to keep open than they brought in each day, placing the conglomerate’s dreams of success in the proverbial real estate short order cook’s for immediate frying. As such, Bradesco was able to save money on the deal by realizing the group’s dire financial situation and calling negotiators out on the fact.

Lázaro Brandão has been the Chairman of the Board of Banco Bradesco since at least 1991, himself being as seasoned among the ranks of Bradesco as Luiz Carlos Trabuco himself. With similar lines of thinking in mind, Mr. Brandão signed off on the potential transaction in August 2015, just days after Mr. Trabuco had mentioned he’d compiled all documents necessary to finalize the transaction on behalf of Bradesco.

Sometime around February of 2016 did HSBC Holdings’ executive decision makers and attorneys finally close the deal, ridding their employer’s name away from all branch locations, ATMs, billboards, and everything else bearing HSBC Brazil’s name.

It’s estimated, according to Banco Bradesco’s President and longtime employee Luiz Carlos Trabuco, that the same level of growth attained overnight with the purchase of HSBC Brazil’s assets would have taken a stifling long six years. When considering the fact that Bradesco has historically been the largest bank in Brazil up until the last decade or so, the takeover of HSBC Brazil was absolutely necessary in attempts to bring its name up to the top of lists ranking Brazil’s largest banks.

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