Bolsonaro’s govt to replace key Banco do Brasil board members

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Chairman Helio Magalhaes and current board members Brandao, Jose Monforte and Fabio Barbosa are not among the names proposed to shareholders by the government. They all had been appointed by Economy Minister Paulo Guedes.

Brandao resigned after Bolsonaro disagreed with cost-cutting measures taken by the CEO, such as the closure of some branches and an employee buyout program.

Bolsonaro named Fausto Ribeiro, currently the CEO of a small business unit of Banco do Brasil, to replace Brandao on March 18. The new CEO’s appointment is still conditional on approval by the bank’s human resources committee and an official nomination by Bolsonaro.

Ribeiro’s appointment was opposed by several existing board’s members. Still, it is not clear whether the four outgoing directors decided not to apply for a renewal of their mandate or if the government pushed them out.

Two former Banco do Brasil executives, Aramis de Andrade and Walter Ribeiro, have been designated to replace two of the outgoing directors. Ieda Cagni, a civil servant at the Office of the General Counsel to the National Treasury, has been named to take the third vacant board seat.

If Fausto Ribeiro is approved as CEO, he will also become a board member.

The appointments contrast with Guedes’ idea of nominating independent members with experience outside the government to state-controlled companies.

Magalhaes, for instance, previously headed the Brazilian units of Citigroup Inc (NYSE:C) and American Express Co (NYSE:AXP).