Brazil’s government chooses Fausto Ribeiro as Banco do Brasil’s next president

RIO DE JANEIRO, BRAZIL – The federal government on Thursday, March 18th, announced the appointment of Fausto de Andrade Ribeiro as the next president of Banco do Brasil, following the not-unexpected resignation of André Brandão, the current president of the state-owned bank.

A career employee at Banco do Brasil since 1988, Ribeiro has served as president of BB Administradora de Consórcios investment management company since last year and will be the state-owned bank’s 3rd president in approximately 8 months. Brandão took over in August last year, replacing Rubem Novaes, who resigned after being displeased with the veto of BB’s privatization plans.

Ribeiro has spent much of his career linked to the bank’s international operations, including the integration of Argentina’s Banco Patagonia and BB’s operations in Spain. According to the bank’s statutes, his name must be approved by the board of directors before he can take office, which is likely to occur on April 1st, when Brandão will officially step down.

Brandão’s resignation, if confirmed, is likely to exacerbate investors’ confidence crisis in state-owned companies. A month ago, Bolsonaro announced the resignation of Petrobras  CEO Roberto Castello Branco, for disagreeing with the oil company’s fuel pricing policy and the independence stance displayed by the executive.

Bolsonaro appointed General Joaquim Silva e Luna to head Petrobras, whose confirmation awaits a board meeting.

Bolsonaro has been pressuring André Brandão since early this year, when the bank announced a reorganization plan that involves the closing of 112 bank branches and a voluntary dismissal program for an estimated 5,000 employees. The plan had great negative repercussion among politicians.

BB has been denying that the federal government had called for a change in leadership and that the discomfort was the result of a communication issue. However, Brandão himself expressed his discomfort in remaining in the post, days after Bolsonaro announced the change in command of Petrobras.

At the time, Economy Minister Paulo Guedes and Central Bank President Roberto Campos Neto had to intervene for Brandão to remain in the post.

Earlier this month, there were rumors that the former private sector executive – he was CEO of HSBC Brazil before taking over BB – was ready to resign, but nothing was confirmed. Bank sources said that the news had been spread to put pressure on the executive and create a fait accompli.

Brandão’s departure may deepen investors’ perception of the federal government’s intervention in state-owned companies, whose shares have been highly volatile in the market in recent weeks.

Source: Exame

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