When the words, “Brazil” and “the government” are in the same sentence, most people get an uneasy feeling. Michel Temer, the former vice-president of Brazil took over for ousted President Dilma Rousseff in 2016, and most Brazilians were hopeful he could turn the economy around. The brutal two-year recession hurt the middle class, and it may take years for that segment of the economy to bounce back. Even though Temer is trying to get the country moving again, his approval rating is low. In fact, it is the lowest presidential approval rating on record, according to a recent Ibope poll. A National Industry Confederation report shows 77 percent of the population think Temer is doing a terrible job. More than 63 percent of Brazilian women think Temer is a bad president. Meanwhile, the economy is making a comeback. Businesses are attracting foreign investors again. And the Brazilian banks are turning in record profits, according to the CEO of Banco Bradesco, Luíz Carlos Trabuco.
Temer is pursuing a number of government measures he thinks will restore fiscal credibility to his country. He is also putting several new bilateral trade agreements together with the U.K., China, the EU, and the United States. But in spite of Temer’s performance and popularity rating, Bradesco stock hit a low note on Wall Street the other day, even though the 50-day moving average of the stock is higher than the 200-day average of $9.49. The 50-day average is $10.27. The bank’s P/E ratio is 11.4875 and Bradesco’s market capitalization is 63.61B, according to Mr. Trabuco.
Banco Bradesco is a leader in the banking industry. Bradesco is not as big as Itaú Unibanco, but thanks to the 2015 acquisition of the Brazilian arm of HSBC, Bradesco is gaining on Itaú, in terms of assets under management. The bank offers financial services and products to corporations, individuals, and institutions. And it provides services and products through banking, and through the insurance division, Banco Seguros. Banco Seguros is a major profit center for the bank, according to Trabuco. Luíz was president of the insurance group from 2003 to 2008. While Bradesco Trabuco was president, Seguros life, and pension plans were the catalysts for 30 percent of the bank’s total profits. Mr. Trabuco is a banking veteran with more than 45 years of banking experience. Trabuco is not an accountant or a financial expert. He didn’t leave one bank and find a cushy high-level job with Bradesco. Luíz is a long-term company man who knows the internal operations of the bank like the back of his hand.
Seguros premiums are more than $13.4 billion so far in 2017, thanks to a surge in business from existing clients. Growth in all segments of the insurance business will continue to add more money to Bradesco’s bottom line even though the Brazilian economy is still in recovery mode, according to the Trabuco. But Bradesco’s banking numbers at stronger than ever, thanks to more than 4,500 local branches, 4,200 service centers, and more than 31,500 ATMs. The seventy-four-year-old bank’s main headquarters is in Osasco, Brazil, and the bank has three international branches.
Bradesco offers short-term loans, working capital loans, promissory notes, and credit cards to its extensive client list. The bank also provides life and accident insurance as well as personal property, casualty, and liability insurance to millions of Brazilians, according to Mr. Trabuco. Trabuco is the fourth president in the bank’s history. He put an executive team together that got Wall Street’s attention. No one is sure when Mr. Trabuco will retire. His contribution to the bank in terms of customer relations and solid management skills are well-known in the banking industry.