Bradesco needs a cultural revolution
The bank must broaden its horizons if performance is to improve.
“I think it’s great. It’s about time we had an outsider as CEO.”
This observation, from a mid-level Bradesco banker, typifies the culture of the bank – new chief executive Marcelo Noronha, a man who joined from BBVA two decades ago, is still regarded as “an outsider”.
Bradesco has just appointed its sixth CEO in its 80-year history, and Noronha is the first not to have spent his entire career within the bank. He's only been there 20 years.
Bradesco is a fascinating firm. The emphasis on recruiting entry-level candidates and promoting from within is an obsession and one that has always differentiated the bank. But it is one that is increasingly hurting it, too.
The bank that has its own internal phrase: 'PO' – an acronym of puro de origem (pure origin) – which refers to employees who have been with the bank from the very start of their working career and not ‘sullied’ by exposure to other companies.
Out of step
But in the modern working world, PO feels a little out of step.
“Bradesco has only managed to oxygenate through acquisitions,” one senior banker told me when I was researching a story about the appointment of the new CEO.
Those acquisitions have brought important businesses to the bank – most notably the insurance business – but also talent. Unable to do mid-level hires in anything like the same capacity as their competitors, any fresh influx of ideas, perspectives and business practices have come from M&A.
Surely the time has come for the bank to open leadership roles to external individuals
When Bradesco bought HSBC’s Brazilian bank the then head of private banking in Brazil, João Albino Winkelmann, told me he was much more excited about gaining access to the HSBC team of relationship bankers and investment advisers than the assets under management.
Like Noronha, Mauricio Minas, the man he will working with closely to revive the bank’s digital banking strategy, is also an 'outsider'. As is the head of Bradesco’s private bank, Guto Miranda, who was part of that HSBC team.
While it is welcome that leadership roles are going to such outsiders, surely the time has come for the bank to open leadership roles to external individuals.
In November last year, I wrote about the need for cultural change at Bradesco. The bank was underperforming, and I suggested that its recruitment strategy – fishing for leaders from an internal pool – was damaging the bank’s ability to compete.
One of the best examples of this was the decision to appoint the previous CEO of its digital bank, Next, from investment banking. That decision would be reversed within a year.
That column prompted more feedback than perhaps any other I have written.
Most correspondents were in broad agreement that there was a straight line between the bank’s culture, its talent management strategy and its underperformance.
In retrospect I should probably also have cited the then CEO himself, Octavio De Lazari, as well.
It is to be hoped that Bradesco will continue to open up and recruit talent wherever it can find it – whether from inside or outside the organization. Because while Noronha has been tasked with revamping the bank’s retail operations, the rot has now much wider than that: the bank’s asset management business, its wealth management business and its investment bank are all underperforming, given the competitive advantages of Bradesco’s scale and geographical presence.
The bank can’t wait for further M&A to oxygenate itself. If it needs to bring in fresh air and fresh ideas from outside, it should do it.