Bradesco: To efficiency and beyond?
Bigger footprint should drive revenues as well as earnings
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.