Brazil’s largest state bank CEO quit on Thursday after crashing earlier this year with President Jair Bolsonaro over an austerity drive. Andre Brandao resigned as chief executive officer of Banco do Brasil SA, the nation’s second-biggest bank by assets, the company said in a regulatory filing.
His exit comes weeks after the head of state-run oil giant Petrobras was fired for letting fuel prices rise.
Brandao, who ended a more than two-decade stint at HSBC Holdings Plc to take over Banco do Brasil last September, spearheaded a plan to shutter some 200 branches and let go more than 5,000 employees to streamline operations and save millions of dollars by 2025.
The move, announced in January, was cheered by investors but quickly drew the far-right president’s ire, with Bolsonaro saying the bank needed to have a “a social side.”
The clash fueled speculation Brandao was on his way out, but he planned to wait until the government announced a successor before resigning. After two months, he got tired of waiting, and simply quit.
Shortly after the resignation was announced, the government tapped Fausto Ribeiro, the chief executive at a smaller unit of the bank, to replace Brandao, the economy ministry said in a note.
Ribeiro has been at the bank since 2000, according to his Linkedin page, with a brief stint at Argentine lender Banco Patagonia, controlled by Banco do Brasil, representing the Brazilian bank in 2010.
The ousters of state company CEOs are fueling doubts that Bolsonaro’s business-friendly agenda can be salvaged ahead of 2022 presidential elections, and if his economy chief, Paulo Guedes, will stay by his side much longer. The Chicago-trained minister has been trying to ease investor fears with promises of fiscal responsibility, but markets have whipsawed after the administration’s recent populist tilt.
Investors were already expecting changes at the top of the state-owned bank. In early February, shares of Banco do Brasil were downgraded to neutral at JPMorgan Chase & Co. on risks to the bank’s cost-cutting efforts amid political noise.
The stock is down 22% since the beginning of the year, compared with a 3.5% drop for the benchmark Ibovespa index. Last year, Brandao replaced Rubem Novaes, the first Banco do Brasil CEO appointed by Bolsonaro, who resigned.
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