Euromoney’s review of global banks: Bradesco

This was the year that Bradesco absorbed HSBC’s Brazilian bank.

The deal, valued at R$16 billion ($4.8 billion), added five million current account clients, around 22,000 employees, 851 branches and 448 ‘mini-branches’. However, the bank said it wanted to retain 100% of HSBC’s customers as well as target deal synergies of 30% of HSBC’s pre-merger expenses.

“I think potentially those synergies will rise to above 40%,” says Alexandre Gluher, executive vice-president at Bradesco. “We completed the integration of HSBC in 2017, but it’s important to stress that the full adjustment will only be felt in the P&L in 2018.”

Bradesco’s rationalization of HSBC fits within a wider and aggressive cost-cutting initiative.  In 2017 the bank launched a voluntary redundancy programme that was taken up by 7,400 employees at a cost of R$2.3 billion – which will realize annual savings of R$1.5 billion from next year.  Total headcount rose to 111,000 after the HSBC acquisition but is already back under 100,000.

Bradesco, with Luiz Trabuco as CEO, is leading the private-sector banks in cutting branches; it closed over 500 in 2017 and is continuing to cut.

Analysts at UBS think that “Bradesco has the most potential to reduce its branch network”.

The bank’s push into digitization helps this reduction in its physical footprint. A record 30-day strike by bank workers in 2016 has enabled banks to accelerate branch closures, because the industrial action forced older customers to adopt digital banking channels. Many have remained online, citing a positive banking experience.

For the full review visit Euromoney’s website

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