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Banco do Brasil Shares Fall After CEO Says He's Leaving

03/19/2021 | 09:34am

By Jeffrey T. Lewis

SAO PAULO--Shares of state-controlled Banco do Brasil SA, the country's second-biggest lender by assets, fell Friday after Chief Executive Officer Andre Brandao said Thursday evening he would leave the job at the end of March.

The bank's shares fell more than 1% in mid-morning trading, after rising at the open along with other Brazilian banks. Brazil's benchmark Bovespa stocks index was up about 0.6% at the same time.

Mr. Brandao, who had been in the position for only six months, is leaving following conflicts with Brazilian President Jair Bolsonaro over the CEO's plans to reduce costs by closing branches and cutting staff, among other things.

Brazil's economy ministry nominated Fausto de Andrade Ribeiro, head of the bank's BB Administradora de Consorcios unit who first joined the bank in 1988, to replace Mr. Brandao.

The tension between Mr. Brandao and Mr. Bolsonaro has been public, and his decision to leave heightens worries among investors about meddling in state companies by the government and over the future of the bank's cost-cutting program.

"There are still a lot of doubts about what will happen at the bank. Will it continue to reorganize and cut costs? These are things that banks around the world are doing," said Pedro Paulo Silveira, chief economist at the Nova Futura brokerage in Sao Paulo.

The news of Mr. Brandao's intention to leave the bank comes a month after President Bolsonaro nominated a new CEO for Petroleo Brasileiro SA, or Petrobras, amid disputes with the oil company's top boss over a series of fuel price hikes.

The news that Mr. Brandao will leave "highlights the risk of political interference in the state bank," said Leo Monteiro, an analyst at the Ativa Investimentos brokerage.

Write to Jeffrey T. Lewis at

(END) Dow Jones Newswires

03-19-21 1033ET

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