Banco do Brasil's CEO André Brandão resigns after wear and tear with the Federal Government

Fausto Ribeiro, nominated by President Jair Bolsonaro, takes the place; exchange may worsen the market perception of government interference in state-owned companies

Banco do Brasil at São Paulo, Brazil.
Photo: Shutterstock

André Brandão, Banco do Brasil chief executive, announced that he resigned from office on Thursday. Then, the federal government announced the appointment of Fausto Ribeiro to occupy the position.

Brandão’s resignation comes after weeks of wear and tear between him and President Jair Bolsonaro. The relationship started to weaken in January, when Banco do Brasil announced a schedule to close 361 branches and a voluntary redundancy program for 5,000 employees. The objective of the measures was to save BRL 2.1 billion by 2025.

READ ALSO: Analysis: How a Petrobras sacking ended Bolsonaro’s free-market flirtation

Bolsonaro disapproved of the measures because of political wear and tear and threatened to fire Brandão, who had just taken over four months ago, last September.

Although both sides deny that there was any pressure from the federal government to replace Brandão, a former HSBC executive, the fact is that Brandão’s departure may intensify investors’ perception of federal government interference in state-owned companies, as happened after the exchange Petrobras command center.

New President

Fausto Ribeiro, Jair Bolsonaro’s nominee for the post, will be the third president of Banco do Brasil in six months – Brandão had replaced Ruben Novaes, who stayed in the post for approximately a year and a half.

READ ALSO: Amazon deforestation and skepticism about Brazil’s commitment weaken EU and Mercosur relations

Ribeiro has been an employee of Banco do Brasil since 1988 and his appointment must be approved by the bank’s board of directors. He is expected to take over in early April.

Get the best insights about Latin America market in your inbox