(Bloomberg Businessweek) -- Tarciana Medeiros has had a good run since being appointed president of Latin America’s second-largest bank in January 2023. She led Banco do Brasil SA to a record profit of 35.6 billion reais ($6.3 billion) last year, up more than 11% from 2022. Its stock jumped 76%, the best-performing bank on the benchmark Ibovespa index for 2023. And Medeiros, the first woman to head the two-century-old institution, implemented a diversity plan that led to thousands of promotions for women and people of color. That in turn helped fuel a 20% increase in loans for companies led by women.
Now, with Brazil’s economy on shakier ground, she’s in for a rougher ride. As inflation picks up, investors are fretting about the government’s ability to control spending and reach its fiscal targets. The expectation is that the central bank will start raising rates again.
That risks hindering the bank’s profitability and expansion plans. And President Luiz Inácio Lula da Silva—no fan of central bank tightening—could call for state-linked lenders such as Banco do Brasil to offer more subsidized credit to consumers and corporations. The challenge for Medeiros, 45, is to deliver both for private shareholders seeking higher profits and for Lula, who wants to ensure the prosperity he promised during his campaign.
Medeiros insists she’s up to the job. For shareholders, she says she’ll focus on newer products such as home equity loans and credit for small and medium companies while still fully serving traditional agribusiness clients. And she says the bank could withstand any attempts at intervention from the president.
So far, Medeiros says, Lula hasn’t asked her to direct credit to any particular client or sector; he understands that the colossus with almost 90,000 employees and branches in more than 5,000 cities must remain independent and reward investors. “Lula knows the bank doesn’t give free money to anyone,” she says. “What he wants is to know if credit is reaching those who need it.”
As a Black woman in a sector dominated by White men, Medeiros represents a departure for Brazil’s finance industry. She’s lesbian, her father ran a street market stall in the northeast state of Paraíba, and she holds a bachelor’s degree from an online school—unusual in a country where the bosses typically hail from wealthy families and attend elite universities. “She’s opening doors and eradicating the notion that women fight for diversity and equality but can’t make a profit,” says Luiza Trajano, chair of Magazine Luiza, one of Brazil’s largest retailers.
At age 8, Medeiros began helping her father hawk fruit, vegetables and bread at the market—teaching her how to interact with customers, a skill she says has served her well over the years. “I had to sell, study and handle my father’s expectations every day,” she says. “I deal well with pressure.”
At a Banco do Brasil branch near her house, lines of customers sometimes stretched as far as her front door. She and her family soon began making extra cash selling snacks and drinks to the queue. “I thought everyone at Banco do Brasil was rich,” she recalls, “and that when I grew up I would work there.”
In her early 20s, Medeiros saw another line at a Banco do Brasil branch—of prospective employees. She applied and was soon hired as a teller. Over the next 20 years she moved from job to job—insurance, credit and customer service—in various cities across northern and central Brazil, picking up a master’s degree along the way. In 2018 she was promoted to head a unit that develops new strategies for selling services.
Campaigning for the presidency in 2022, Lula pledged far more diversity than his predecessor, Jair Bolsonaro, and once elected he met with several women from Banco do Brasil, including Medeiros. “We talked about interest rates, credit growth, agriculture,” she recalls. “I only realized it was a job interview after I left.”
A few weeks later, she was shocked when she was offered the post. She faced resistance from colleagues who considered her too junior, but her ability to connect with others made her stand out. And she got support from the bank’s union, a big plus for Lula, a former labor leader.
Banco do Brasil has endured plenty of political pressure over the years, and its shares trade at a discount to those of fully private rivals. During the administration of President Dilma Rousseff, who succeeded Lula after an earlier term, the bank provided billions of dollars of additional credit to individuals and small businesses, which contributed to higher delinquencies and a decline in the bank’s share price. “There’s worry that the bank will experience this type of pressure again,” says Carlos Daltozo of consulting firm Eleven Financial Research.
Banco do Brasil this year has increased the funds set aside to pay for bad loans by almost 10%, to 34 billion reais, as it expands its loan business to a broader range of clients. “That raises concerns about the potential for an increase in defaults,” says Pedro Gonzaga, head of research at Mantaro Capital Corp.
In November, Medeiros publicly asked forgiveness for the bank’s role in the slave trade during Brazil’s colonial era, announcing plans to promote Afro-Brazilian culture and fund training of Black youths for better jobs. “All of Brazilian society should apologize to Black people,” she wrote in an open letter, pledging to “confront structural racism.”
“It’s not unusual that the secretaries and I are the only women” in meetings, she says. So she’s set a target of a leadership that’s 30% female and 30% non-White by 2025, versus about a quarter today. Already more than 4,200 women have been promoted on her watch, and her team now requires service providers to sign contracts calling for greater diversity. “When you feel part of the place you work, you work better,” Medeiros says. “Diversity and results are not separate.”
While she’s earned wide praise for such initiatives, some inside the bank say her focus on diversity diverts her attention from the core business. Medeiros’ backers counter that such criticism stems from the sexist mindset that’s long been pervasive in the industry. “She’s trying to bring diversity to various levels,” says Sylvia Coutinho, former head of Latin America for UBS Group AG. “This is very cool.” —With Raphael Almeida Dos Santos and Cristiane LucchesiRead next: Lula Fires Human Rights Minister Over Harassment Allegation
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