Since taking over the helm at Brazilian financial giant Bradesco in 2009, Luiz Carlos Trabuco Cappi, the quietly formidable CEO of the firm, has seen a bag of mixed results over his tenure.
For the first six years of his reign as president and CEO, he had many loud and extremely motivated critics, with calls for his resignation growing louder throughout the early 2010s, as the bank’s stock prices collapses amid contractions in its business and weak prospects for any hope of future organic growth.
But then in 2015, Trabuco Cappi pulled off one of the biggest coups in Brazilian banking history. He was able to complete the acquisition of all of the assets of HSBC Brazil, a move that earned him the 2015 Isto E Dinheiro Entrepreneur of the Year Award. Among his fans, he was instantly redeemed. And his critics were forced into silence, as the man who had helped build his bank from a two-branch savings bank into a global financial behemoth had suddenly positioned his firm to smash the competition into ignominious oblivion and transform his bank into a hard monopoly on Brazilian retail banking.
In Latin America, monopolies grow as naturally as bananas
Throughout the tumultuous history of Latin America, the instability of governments and withering poverty of the often serf-like majorities have been punctuated with eras of stability. These often have taken on a quasi-fascistic character, with a strong-arm despot overseeing one or more profitable industries, paying off adversaries and rewarding allies. The key component of this model of governance has been the corporate monopoly.
Although descriptions of such forms of government and business ring unpleasantly among Western ears, they have often done a great deal of good. Unlike in developed countries, where gross monopolies are generally not tolerated for long, the Latin American countries where these businesses have thrived have often been racked by extreme poverty, illiteracy and a generally undeveloped landscape with little in the way of a formal economy.
Companies like The United Fruit Company, International Telephone and Telegraph and Telmex, which have all supported and been supported by autocratic and dictatorial governments, have also been able to bring modernity and a theretofore unseen level of prosperity to the countries in which they have operated. It is for this reason that many Latinos have ambivalent feelings towards monopolies and why they have proven to be such a persistent form throughout the region.
It is in this context that we must consider Bradesco’s bid to become the unquestioned monopoly of Brazilian banking. Bradesco and Trabuco himself have done a great deal of modernizing on their own. Bradesco is largely responsible for the explosion of personal savings and checking accounts in Brazil over the last 20 years. This is a country where, prior to the 2000s, most of its populace still lived in makeshift huts or favelas and had no access to banking facilities. This was an untenable situation for a country that aspired to first-world status. Bradesco, partially helped along by Trabuco, did a great deal to modernize the country financially and pave the way for the incredible degree of development that has occurred over the last 20 years.
And there is no reason to believe that Bradesco would not continue its project of bringing development and modernity to Brazil, even if it were to attain monopoly status. The bank has been responsible for billions in real estate development loans and business loans. As such, it has played a central role in creating modern, livable spaces and fomenting the growth of millions of permanent and high-paying jobs. With a track record like that, it is hard to second guess how the company would act with even fewer competitors in its way.
Although Trabuco himself has been muted about his intentions, most industry observers agree that he will likely use all tools at his disposal to annihilate Itau Unibanco and drive them from his markets. Whatever happens, the next few years will make Bradesco an interesting story to watch.
Learn more about Luiz Carlos Trabuco Cappi: http://fotos.estadao.com.br/galerias/cultura,luiz-carlos-trabuco-cappi-e-lucilia-diniz-ofereceram-jantar-em-torno-do-prefeito-joao-doria-e-sua-mulher-bia-nos-jardins,30901