banco real

CONTENTSINTRODUCTION.......................................................................................................................................1

BANCO REAL........................................................................................................................................1

OBJECTIVE OF THE CHANGE PROCESS..............................................................................................2

Corporate Social Responsibility as a Vehicle for Achieving Goal...........................................................2

KEY ELEMENTS OF THE CHANGE PROCESS.....................................................................................3

Overall Structure to Shape the Culture....................................................................................................4

New Products and Initiatives of BANCO REAL.....................................................................................5

RESULTS OF THE CHANGE PROCESS.................................................................................................8

BARRIERS TO CHANGE..........................................................................................................................9

Loss of clients in pursuit of Social Responsibility...........................................................................9

Flaws in the credit-risk analysis.....................................................................................................10

Resistance from Audit by Large Corporations...............................................................................10

Ethical Funds, the only product being “Ethical”............................................................................10

Weakness in Bank’s Relationship with Suppliers..........................................................................10

The Bond after Death Incident.......................................................................................................10

Seven Skills of Change Leaders............................................................................................................11

1. Turning in to the Environment...................................................................................................11

2. Kaleidoscope Thinking: Stimulating Breakthrough Ideas..........................................................11

3. Setting the theme: Communicating Inspiring Visions................................................................11

4. Enlisting Backers and Supporters: Getting Buy-in, Building Coalition.....................................11

5. Developing the Dream: Nurturing the Working Team...............................................................11

6. Mastering the Difficult Middles: Persisting and Preserving.......................................................11

7. Celebrating Accomplishments: Making Everyone a Hero.........................................................12

CORE DECISION.....................................................................................................................................12

LONG TERM STRATEGY AND RELATED DECISIONS....................................................................12

WHAT IS BANCO REAL NOW?............................................................................................................14

BANCO REAL: Banking on Sustainability

“The Business of business is sustainable business”

-Ervin Laszlo

INTRODUCTION

Brazil is an economic power and regional leader in the South America. The Brazilian economy

faces a number of challenges such as declining growth rate (-0.22% growth in GDP in 2004),

increasing inflation rates, etc.

Brazilian banking Sector was divided into the following groups:

o Federally-owned

BANCO do Brasil

Caixa Economica Federal

o State-owned

o Private Brazilian Controlled

o Foreign-Controlled Banks

During the 1980’s inflation in Brazil soared to about 200% annually, due to which the banks

become highly dependent on float revenue. Due to inflation, the banking sector went through two

phases of consolidation between 1994 and 2004. In the first consolidation phase, the inflation

was controlled using exchange rates. The local currency was appreciated, which consequently

made imports cheaper and exports expensive. As a result of this, ten state owned banks were

closed and twelve were privatized. The program was introduced to create stability in the

economy, but it created difficulties in the administrative structures because of the dependency of

the banking sector on float revenues. In the second phase of consolidation, the local interest rates

increased manifolds, because of the financial crisis in Asia, Mexico and Russia. Many

international banks entered into the Brazilian market for the first time, acquiring several

medium-sized private sector banks caught up in the after-effects of the situation.

BANCO REAL

BANCO REAL was a Federally-owned Bank. In 1998, BANCO REAL was acquired by ABN

AMRO S.A due to consolidation in the Brazilian financial sector. BANCO REAL Group was

founded in 1925, with the aim to provide finances to the farmers. By 2005, BANCO REAL had

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1890 branches, 28,571 employees and 9.2 million customers. After the incorporation of Banco

Real by Santander, Santander became Brazil’s third largest private sector bank

OBJECTIVE OF THE CHANGE PROCESS

Like any merger, BANCO REAL also faced the challenge of building a new culture in the

organization. The top executives in the organization decided to bring change in the culture of the

organization by introducing the distinctive theme of “Value Creation” in the company. This

theme of value creation was also evident from the mission statement of BANCO REAL which is

as follows:

“Satisfying clients, generating value for stockholders, employees,

and the communities in which we operate by having an ethical

posture in business, differentiating ourselves by the quality of our

products, services, and especially our customer service.”

BANCO REAL’s model was based on satisfying the client through focusing on clients,

committed and qualified staff, competitive tolls and corporate values. The result would be

satisfying shareholders, employees and the community as a whole.

Corporate Social Responsibility as a Vehicle for Achieving Goal

The inception of BANCO de Valor (Bank of Value) concept was brought about through a series

of meetings and brainstorming amongst the leadership group. The organization started to address

the social and ecological challenges faced by the country based on the social responsibility

parameters developed by the Ethos Institute. They wanted to overcome the problems faced by

the people by these social responsibility measures. Their focus was strategic, and wanted to do

the right thing in the right way.

Corporate Social Responsibility broadly defines Economic, Social and Environmental

contributions of the organizations. It includes a number of initiatives such as employee relations,

corporate ethics, human rights, community relations, etc. Those companies are considered to be

socially responsible that consider the impact on the environment in the process of making profit-

making decisions. Companies that are engaged in corporate social responsibility manage their

reputation by creating a good image in the minds of the stakeholders of the company. CSR

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increases the trust of stakeholders in the organization, by giving them a feeling that the company

can’t do anything that is not in their interest since the company is fulfilling its social

responsibility.

Only by effectively managing social and environmental opportunities alongside risks, can banks

create long term value for their businesses. Considering risk alone will not be enough to generate

new markets and profits in the long run. To manage both risk and opportunities strategically and

comprehensively, banks need to integrate a systematic approach- a social and environmental

management system (SEMS) into their processes and operations. Building and operating an

SEMS entails several processes that must occur in parallel which BANCO REAL

Therefore, considering BANCO REAL’s goal of ingraining value-creation in the culture and the

economic and social conditions of Brazil, CSR was an appropriate way to achieve the goal.

KEY ELEMENTS OF THE CHANGE PROCESS

The bank took responsibility of transforming an abandoned alley beside the bank and constructed

new pavement and a garden. The basic idea behind this initiative was that the whole world could

be changed, if every person takes the responsibility of transforming the alley next door.

An important incident that made the organization feel the importance of changing the culture was

when an employee of the bank sold a long term bond to a 70 year old person. The family of that

person took the issue to the internet and criticized this as the bank’s lack of ethical

professionalism. From that point onwards, the organization decided that it was better to lose a

deal than losing a relationship. The president quoted:

“We couldn’t possibly build a brand focused on customer satisfaction, social

responsibility, and environmental sustainability, if we didn’t experience the

culture. From this point on, we knew actions should be implemented from the

inside”.

In order to accomplish its goals, it had to start from the inside that is from the base. The bank had

to transform its own culture in order to bring about a change.

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Further in order to change the culture, the organization developed a formal department “Social

Responsibility Directorate”, which was later changed to Directorate of Education and

Sustainable Development in 2004. It was a temporary department developed with the aim of

ingraining social responsibility in the culture of the organization. Three committees of executive

directors and managers were developed; market, management and social action. The purpose was

to oversee the projects with the executive directors being the sponsors of the projects. Some of

the main projects and institutions subsidized by BANCO REAL are Escote Brasil Institute,

Bandepe Cultural Institute,Care Brasil, Instituto Brasil Voluntario etc.

In order to pursue the goal of the bank of being customer-focused, the bank took several actions

at the core of the business such as increasing the autonomy of branches, reviewing the

communication of the bank with the customers etc. However, the social responsibility goal was

complex, as being socially responsible meant losing customers who posed serious socio-

environmental threats to the society. The customers were also able to gain benefits through this,

as they were able to propose changes that made the projects more feasible and helped the

organizations in achieving their goals.

In 2004, a training program in partnership with IFC was launched to educate managers,

executives and credit analysts about the socio-environmental risks. Moreover, character was

considered an important determinant in the credit evaluation.

Overall Structure to Shape the Culture

Fabio C. Barbosa, the president of FEBRABAN, the Brazilian banking association and newly

appointed head of BANCO REAL, faced the challenge of integrating the merger after the

acquisition. At a time when several other acquisitions were taking place in the banking sector,

competition was strong. Given the competitive landscape in the industry and the huge societal

problems, he knew it was possible to establish a new bank; a bank that would not only be

distinguished from its competitors, but, most importantly, one that would have a new identity

that could transform the society. Inspired by the vision of creating ‘a new bank for a new

society,’ Mr. Barbosa and other senior executives of the bank believed they could succeed by

‘doing the right things, the right way’. ‘The right way’ meant placing corporate social

responsibility at the center of their business activities to make an impact. They believed that this

new approach could be beneficial not only in terms of profit but also in terms of creating value

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for their customers and society. Although this concept was applauded by many of the employees

but still there were some executives who opposed this idea because they did not consider the idea

of “giving everything to everyone.”

BANCO REAL was focusing on the relationship side of the business through implementing a

strategy that could be a growth factor in the long run of the business. The new adopted strategy

acted as a payoff for the success in the future meeting the goals of the banking industry as

sustainability, a centre of their business activities, that improved their clients ratio and the

advantage of first movers in the industry led to a success factor. Fulfilling the social

responsibility goal may result in some pay-offs such as the bank can lose a big client or the bank

can refuse to a big client to work with who are indulged in some negative tasks. To further

succeed in its mission, management conceived the initial structure to ensure that corporate social

responsibility was incorporated at all levels of the organization. The staff was most important for

the continued implementation of the vision. Senior executives of the bank believed that a more

engaged and motivated workforce, proud to work for the bank, would independently enact

responsible business decisions. The staff would then provide their customers with a better

service, who would in return be more satisfied. In order to develop a culture that reflected the

values and principles of the bank, its staff’s level of socio-environmental awareness had to be

raised. Education was considered the best method to achieve this. Consequently, the senior

management decided to form a directorate of education and sustainable development by

temporarily unifying the sustainability and education departments in 2003. The main goal of this

unified department was to train the staff on the topic of sustainability and to ensure that it was

also incorporated in all the training programs at BANCO REAL. Moreover, BANCO REAL was

among the ten initial banks in 2003 to have voluntarily adopted the Equator Principles, which are

a set of guidelines established by a group of financial institutions to ensure that the projects they

finance are structured in socially responsible way and reflect sound socio-environmental

management practices.

New Products and Initiatives of BANCO REAL

In November 2001, Ethical Mutual Funds, a new product was introduced for socio-

environmental investor. After only three years, Ethical Mutual Funds was composed of R$75

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million and had a return of 159.5%. Although it was proportion of the R$29.4 billion managed

by the companies but it was an important initiative that showed that investment in socio-

environmentally responsible companies can pay off in the long run.

Another major product was Socio-environmental Financial Products. Moreover, the bank also

introduced Micro-financing, by developing a micro-credit development group in association

with an NGO. For this, they reached out to the low income communities and provided credit to

them.

A major achievement for BANCO REAL was the grant of US$ 51 million to the bank by World

Bank for the improvement in society and corporate governance practices.

The bank also wanted to involve its suppliers in its social responsibility program, by convincing

them to adopt the principles of corporate social responsibility. Moreover, formal guidelines for

relationship with suppliers were developed.

Within the bank, it introduced two campaigns: 3Rs and Diversity Campaign to be a role model

of social responsibility for customers and suppliers. Activities such as Environmental Week and

Diversity Day were launched to stress the importance of these campaigns. Overall, a bank culture

was formed that was based on employee participation, creativity, employee development, and

focus on abundant communication.

In order to support the value creation theme, the bank adopted corporate social responsibility

initiatives. In order to succeed, its clients, suppliers and employees in the process to achieve its

goal of creating value for the society.

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Figure 1: Change Wheel

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"Value-creation" Theme

CSR Initiatives by Banco

Involving Clients in the process

Involving Suppliers in the

process

Involving Employees in the

process


RESULTS OF THE CHANGE PROCESS

The goal of the organization behind all these initiatives was not to seen as a green bank, but

profit maximization as they believed that the only way an organization can sustain in the long

run is if such conditions are created in the short and the medium term that provides

sustainability. Moving away from defensive banking, where management of social and

environmental impacts is seen as an additional cost towards sustainable banking is considered as

an advantage and an opportunity for growth. Social and environmental considerations are

important in ensuring competitiveness and differentiation in competitive markets.

Introduction to various innovative approaches to sustainability can bring substantial benefits to

the bank such as:

o Greater and higher long term returns by financing more sustainable projects and

bu sinesses.

o Reduced risk

o New business development through new products and services

o Increased market share in sustainability driven sectors

o Enhanced reputation and better brand value

o Better access to capital from international financial organizations

o Increased value to shareholders.

The net profit of the company increased over the years. The net profit of the company increased

from the period 2000 to 2004, by almost 91%. However, the ROE and ROA have decreased over

the years, which show the inability of the company to efficiently utilize its assets and equity.

Table 1: Net Profits of BANCO REAL

Year 2000 2001 2002 2003 2004

Net Profit (R$ Millions) 649 784 1208 1137 1237

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Moreover, in terms of achieving the goal of value creation, the company was also successful,

although it faced some challenges along the way. The bank was successful in building the image

of always bringing in new products. The competitors were also following the strategies being

followed by BANCO REAL, but BANCO retained the first mover advantage. Also the suppliers

of BANCO were willing to adopt the principles of CSR and reaped benefits. For example, a

supplier of BANCO REAL, Help Express wrote a code of ethics, which reduced the accidents

and the customer complaints.

Alleviating poverty and protecting human rights remain the top priorities in emerging markets.

These CSR initiatives will also help the business in alleviating poverty to some extent in the

country, where 20% of the population accounted for only 2.2% of the total national income.

They represent a vast market for banks to provide housing and renovation services. Through

BANCO REAL’s micro-financing initiative, the bank was able to reach out to the low income

community and provided them opportunity to sustain their businesses by extending them credits.

Targeting the low income groups can help a financial institution boost its reputation through

winning community support. This may also result in greater government support and financing

from international development banks and aid agencies, as their main goals are poverty

alleviation and providing access to credit to underserved populations.

BARRIERS TO CHANGE

How well a bank handles social and environmental risk is very important because with

unrestricted information flows, such risks can affect a banks reputation and long term business.

The bank may face social and environmental risks in its lending operations. The direct risks

include lender liability for social or environmental damage caused by client. Indirect risks are

risks associated with weakened financial and operational conditions of clients. Such problems

can affect the client’s ability to repay the loan or can result in reduced market value of the

collateral. Failure on part of the client in handling social and environmental considerations and

risks can hurt the business which in turn can hurt the bank that has supported it. Further it can

also result in reputational risk, the potential for negative publicity and thus damage to brand

value arising from institutions poor social and environmental practices.

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Loss of clients in pursuit of Social Responsibility

The bank decided not to keep relationship with the organizations that were posing socio-

environmental risks. This resulted in a small number of organizations being removed from the

client list. Although, this posed as a threat, but the organization was able to reinforce the element

of “Value Creation” through this initiative.

Flaws in the credit-risk analysis

The company decided to make character an important determinant of the credit evaluation.

However, this evaluation process could not be certain about some issues like the trustworthiness

of the financial statements, as small corporations were not always audited. Moreover, issues like

child labor and compliance with the socio-environmental matters could not be proved. This could

pose a problem for the organization and earn a bad reputation, if the bank conducted business

with some company, which later proved to be posing socio-environmental risks.

Resistance from Audit by Large Corporations

The bank decided to conduct business with socially responsible companies, and imposed many

requirements on them. Large corporations were resisting the idea of being subjected to audits

which could create serious problems for the bank. The leaders recognized this problem, but did

not take any steps to solve this problem.

Ethical Funds, the only product being “Ethical”

The name Ethical Mutual Fund was giving people the wrong idea that it was the only product

offered by the company that was ethical. It gave the idea that the other products offered by the

bank did not meet the ethical standard. The leaders at BANCO REAL did not solve this problem

as well.

Weakness in Bank’s Relationship with Suppliers

The bank extensively advocated the idea of being socially responsible to its suppliers as well.

However, 30% of the bank’s payments to its suppliers were not made in a timely fashion, with

no particular reason. Since, corporate social responsibility promotes fairness in all the

relationships with the stakeholders; therefore it was important that the suppliers were paid on

time.

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The Bond after Death Incident

An employee of the BANCO REAL sold a long term bond to a 70 year old person. The family of

that person took the issue to the internet and criticized this as the bank’s lack of ethical

professionalism. The leaders immediately took notice of the incident and quickly cancelled this

transaction to overcome the bad publicity and decided that it was better to lose a deal than losing

a relationship.

Seven Skills of Change Leaders

The evaluation of the leaders in bringing in change in the organization, based on the seven skills

of the change leaders is as follows:

1. Turning in to the Environment

The leadership group at BANCO REAL possessed this skill. They not only looked for

opportunities in their organization but also helped suppliers and clients in bringing in changes in

their organizations.

2. Kaleidoscope Thinking: Stimulating Breakthrough Ideas

The leaders at BANCO REAL possessed this skill. They were able to bring in the “BANCO da

Valor” concept through informal brainstorming. A group of 8 bank executives and external

consultants carried out brainstorming meeting every week on Wednesday.

3. Setting the theme: Communicating Inspiring Visions

This skill was also present in the leaders at BANCO REAL. They were not only able to bring in

CSR in their own organizations, but also encouraged other stakeholders to engage in CSR

initiatives. The suppliers and the customers also adopted CSR practices.

4. Enlisting Backers and Supporters: Getting Buy-in, Building Coalition

The leaders also possessed this skill. After a lot of brainstorming, the change was brought in the

organization. They also gathered the data and assessed it. Potential risks were also assessed

based on the social responsibility parameters developed by the Ethos Institute. Therefore, it was

made sure that everything was in place before the change announcement.

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5. Developing the Dream: Nurturing the Working Team

The employees were also involved in the change process so the organization didn’t face any

problems from their side, therefore, it can be said that the leaders possessed these skills as well.

6. Mastering the Difficult Middles: Persisting and Preserving

This skill was also present in the leaders at BANCO REAL to some extent. They were able to

handle some of problems but left others completely. The leaders were very quick in handling the

incident where a long term bond was sold to a 70 year old person, but did not solve the problems

faced by the middle aged, middle management group in catering the commercial clients.

7. Celebrating Accomplishments: Making Everyone a Hero

Since the change was still in place, therefore this skill does not apply to the leaders at BANCO

REAL.

CORE DECISION

The core decision to be made now is to decide whether the initiatives done by the organization

were focused and successful in achieving the profit maximization and socio-environmental goals

of the organization. It also had to see if it had been overly focused on these initiatives that

communication clarity has been compromised. A major decision was to see whether the

organization should continue its current efforts or should it cut back on it efforts or focus more

on them.

LONG TERM STRATEGY AND RELATED DECISIONS

The company should continue its efforts to improve the socio-environmental conditions. The

company would be at loss if it altogether leaves the initiatives, as it has included it in its mission

statement. The company has also included its customers, suppliers and employees in this

program, so cutting back on these initiatives will earn a bad reputation for the company.

Moreover, the company is under deep scrutiny of public evaluation and NGOs. The openness

and transparency standards that come with socially responsible subjects the leaders to public

evaluations and NGOs test, and failures to meet their requirements can have drastic effects on the

bank.

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Apart from that, the company has developed an image of developing new products. The

competitors of BANCO REAL are also introducing the corporate social responsibility theme in

its business, seeing the potential of CSR. Therefore, it was also important to continue these

initiatives to remain competitive.

Also the company should not add to these initiatives as the ROE and ROA have decreased over

the years, despite the fact that its net profits have increased. ROE has a negative growth rate of

6.3%, whereas ROA has a negative growth rate of 3.6%.

Table 2: Net Profit, ROE & ROA of BANCO REAL

Year 2000 2001 2002 2003 2004

Net Profit (R$ Millions) 649 784 1208 1137 1237

Return on Equity (ROE) 22.1% 20.8% 25.5% 17.1% 15.9%

Return on Assets (ROA) 2.4% 2.5% 3.3% 2.1% 2.0%

This shows that the company is not very efficient in the utilization of its assets and equity.

Therefore, the company needs to make efforts to increase the utilization of its assets and equity.

Therefore, it is not advisable for the company to increase the socio-environmental initiatives.

Although it should be noted that Banco Real acquired 2 banks, Banco do Estado do Paraiba in

2001, and Banco Sudameris in 2003, which could have led to the low ROE for those years.

Another important aspect to consider for the low ROE figures may be due to the Presidential

Elections of 2002 and the election of Luiz Inácio Lula da Silva as President. The impact of his

coming into power can be seen upsetting in the beginning, as in the 2002 campaign, Lula

foreswore his platform plank of linking the payment of Brazil's foreign debt to a prior thorough

audit. This last point had worried economists, businessmen and banks, who feared that even a

partial Brazilian default along with the existing Argentine default would have a massive ripple

effect through the world economy. Also the fear of drastic measures increased internal market

speculation and this led to some market hysteria, contributing to a drop in the value of the real,

and a downgrade of Brazil's credit rating.

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The new culture was not fully acceptable by the middle age, middle management group, which

was mainly dealing with the commercial clients. The commercial clients, not accustomed to

being audited as by BANCO REAL, could pose some serious problems. In order for this group to

fully accept the culture, there was a need to communicate to the employees the benefits CSR has

brought to the companies. Moreover, the commercial companies being handled by these

employees should also be convinced that being socially responsible with help them earn a good

reputation in the market and they might be able to bring in more efficient solutions to their

problems and lower their costs.

But the road ahead was a long journey. The bank executives knew that strong leadership from

the top was not enough. For the initiatives to endure and the bank to uphold its long journey, it

was crucial to build and train effective leaders across all departments; leaders who could drive

sustainability in the future, not only within the company itself but also beyond the frontiers of the

bank. Also effective leadership meant forecasting future trends and making them a present need.

The bank was aware that the likelihood that the demand for sustainable products would increase

over the next years.

Several factors contributed to the bank’s success. Behind the integration of the new business

model was a strong leadership that mostly originated from the senior bank executives. Among

those leaders were Mr. Barbosa and Ms. Pinto, who had had the vision and power to ingrain

corporate social responsibility and place it at the center of all their business activities. Mr.

Barbosa was admired by the public and regarded as a role model for his social commitment. In

addition, by sharing best practices that allowed others to benefit from its learning journey, the

bank could accelerate the adoption of more sustainable practices by others – a catalyzing effect

that facilitated the bank’s greater impact. The bank’s ability to engage others in its road to

sustainability, focus on innovation to increase its socio environmental performance and

educating on sustainability to ensure that the bank’s vision was carried out throughout likewise

contributed to its success.

At the same time, the bank faced several challenges. In sharing its best externally and

considering that many of its competitors had adopted more sustainable practices over time, many

feared the bank would lose its dominant position as a sustainability market leader. In addition, by

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launching so many different initiatives, the problem was to how to keep track of their progress

and measure their impact over time.

Whether sustainability will remain at the center of all the banks business activities still remains a

question. As Mr. Barbosa looks ahead, there are many roads, which all lead in different

directions, but fundamentally the right one is clear. This road could imply choosing a distinct

direction away from the others. Nevertheless, this road could again be the one that could make

all the difference in future. Mr. Barbosa is highly committed in pursuing his strategy because it is

important to the bank as a central part of its culture and brand.

WHAT IS BANCO REAL NOW?

Following the Value Proposition statement of BANCO Real; ‘ Succeed by doing the right

things, the right way’. BANCO Real had made significant steps towards enhancing its socio-

environmental performance. At the same time, the number of employees engaged either fully or

partially in sustainability increased over the years. Since its financial products for sustainability

increased from 217 million to 825 million in 2007; reflecting a total growth increase of about

280 per cent. ABN AMRO REAL saw this as an opportunity to tap a new market and create a

new sustainable product solution. Together with the IFC, the bank set up a student lending

facility for 50 million, from which students can lend money for a participating university and

repay the loan after their graduation. In 2007, the bank’s surveys revealed that 74 per cent of its

clients were satisfied, which included 36 per cent who were totally satisfied.

The number of employees grew to approximately 27,000 and their satisfaction level was

estimated to be well over 90 per cent between 2005 and 2007. In 2006 alone, the bank won a

total of 49 awards, including the Eco 2006 Award from the American Chamber of Commerce.

The bank went from #11 as the greatest place to work for in Brazil in 2006, to #6 in 2008..

In 2007, BANCO Santander participated along with Royal Bank of Scotland and Fortis in the

acquisition of the Dutch financial conglomerate ABN AMRO. Santander took over ABN

AMRO's Brazilian assets, mainly formed by the latter's acquisition of BANCO Real, and

developed a truly national platform, dropping the Banespa name and adopting the Santander

Brazil franchise BANCO Santander Brazil is a subsidiary of BANCO Santander in Brazil, its

largest division in Latin America and one of the world's most important, accounting for 50% of

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the total profit of the group. Currently, it has more than 9 million customers, it operates in all

segments of financial markets, with a network of 3696 branches and service centers and 18,312

ATMs and is ranked #2 in ‘’The World's Top 20 Green Banks in 2012’’, down from the #1 spot

in 2011

Today, Grupo Santander Brazil is involved in everything from renewable energy financing and

carbon credit trading to tailored banking for disabled customers and microcredit services.

Santander is the fifth largest commercial bank in Brazil by assets, after Itaú UniBANCO,

BANCO do Brazil, Bradesco and Caixa Econômica Federal.

Mr. Fabio Barbosa retained the position when BANCO Real merged with Spain’s Grupo

Santander in 2007 to form the Brazilian bank Grupo Santander Brazil. He served as Chairman of

BANCO Santander (Brazil) S.A until September 22, 2011, Chief Executive Officer until

February 2011 and also served as its President until February 4, 2011. He was responsible for its

strategy in Brazil.

Even after the acquisition of BANCO Real in October 2007, his goal was to see the resulting

alliance become the “best bank in Brazil”, but although he was a banker through and through,

that is his aim to generate maximum profits for the shareholders, but sustainability has always

been his guiding light, which means to also become a reference for society. He took the idea of

taking profitability and sustainability side by side with him to Santander Brazil. As he looked

ahead, there were many roads, which all lead in different directions, but fundamentally the right

one will be clear. This road could imply choosing a distinct direction away from the others.

Nevertheless, this road could again be the one that could make all the difference in future.

Mr. Barbosa continues to be recognized for his efforts to integrate philanthropic and sustainable

practices into business models. In 2010 he was named Leader of Social Change by the

Foundation for Social Change in partnership with the UN, and in July 2011, the UN Foundation

announced he had joined its Board of Directors.

In 2013, he stepped down as CFO of BG Group (a British multinational oil and gas company)

due to health concerns.

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banco real

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