(Adds details of candidates for the CEO post)
SAO PAULO, Oct 11 (Reuters) - Brazil’s Banco Bradesco SA Chief Executive Luiz Carlos Trabuco said on Wednesday the lender will choose his successor from a group of internal candidates in the coming months, the day after the bank’s longtime chairman resigned.
Trabuco, kicking off a long-awaited management shakeup, said he will temporarily serve as both CEO and chairman at Brazil’s second-largest private lender following the resignation of Chairman Lázaro Brandão, 91, one of the country’s most powerful bankers and a fixture in financial industry circles for decades.
After helping select his successor, Trabuco, 66, will become chairman full-time. His replacement as CEO will be announced 30 days before the bank’s annual shareholder meeting in March 2018, executives told journalists.
Brandão said in his valedictory remarks that the new CEO’s main challenge will be a strategy for the bank’s 5,000 bank branches.
Bradesco earlier this year began scaling back its branch network after decades of expansion, part of efforts to bolster profitability as Brazil emerges from a harsh recession.
The bank last year raised its CEO retirement age from 65 to 67, allowing Trabuco to stay at the helm until 2019. At the time, the bank decided to delay succession talks after the death of insurance executive Marco Antonio Rossi, a leading candidate for the post, in a plane crash.
Brandao’s resignation accelerated the time frame for the change. The main candidates are Bradesco vice presidents. Mauricio Minas, who oversees technology, is a top contender, as is Chief Risk Officer Alexandre Gluher. Other candidates are Josué Pancini, with extensive retail banking experience, and insurance executive Octavio Lazari. All have been at Bradesco for at least 20 years.
A nascent economic recovery may give the next CEO a chance to boost the bank’s profitability and reduce loan losses after delinquencies and writedowns surged during Brazil’s worst recession in a century.
Bradesco in July posted forecast-beating quarterly earnings as it succeeded in reducing provisioning and said it expected gradual loan growth by year-end.
Trabuco said he sees credit growing “substantially” more next year.
But Morningstar Equity Research analysts warned in a recent note that a sluggish recovery was likely to pressure the bank’s margins.
“Bradesco will be challenged by Brazil’s struggling economy and lower interest rates,” wrote analyst Colin Plunkett. (Reporting by Aluisio Alves and Tatiana Bautzer, editing by Christian Plumb and Jonathan Oatis)