Banco do Brasil announced a reorganization programme on January 11 to rationalize its cost base, refocus its strategy and boost margins.
The plan’s author, and the bank’s chief executive, Andre Brandao, had been recruited to the role the previous September from HSBC, where he was head of global banking and markets for the Americas and had overseen a similar strategic challenge.
Analysts welcomed the plan, which proposed a ‘de-activation’ of 361 business units, including 112 full branches, and envisaged redundancy of 5,000 employees.
A report from Citi praised the move, which would lead to savings in administration of R$2.7 billion ($513 million) by 2025, as well as putting the bank in a better position for a new competitive environment.
Citi also estimated the plan would generate 42 basis points of improvement in the bank’s efficiency rating every year for the next four years.
However, two days later, on January 13, Valor, Brazil’s leading financial paper, splashed a headline saying that the country’s president, Jair Bolsonaro, had fired Brandao after becoming incensed at the planned lay-offs.
The bank issued a statement the following day saying that no official termination had come.
It then emerged that the president of the central bank, Roberto Campos – who had nominated Brandao for the position – and Paulo Guedes, the finance minister who had approved the plan, had intervened to stave off Brandao’s dismissal.
