Bradesco Bank avoids bricks and mortar in favor of digital banking
Banks with billions of dollars in assets typically operate lots of branches to cater to near by clients. Not Bradesco Bank, the Coral Gables-based outlier with only one office for all its customers worldwide. Instead, Bradesco Bank leverages technology to serve distant clients, mainly in Central America and Brazil, so those customers can make deposits in the United States, buy properties in the U.S., and through its investment arm, buy and sell U.S. stocks and bonds, among other activities.
Since 2023, the bank operates from two floors at the prestigious Plaza Coral Gables complex and today employs more than 260 people there. Business is growing, with assets reaching almost $5 billion. That includes more than $1.5 billion in new money brought in from Brazilian clients since 2020, when Brazil’s banking behemoth Bradesco purchased the Florida bank, says CEO Henrique Lima.
“We see the future of banking as having less transactions in branches [with] a physical presence more to foster business regionally,” says Lima. Bradesco may open another office to build relationships in a different U.S. region, he says.
Founded in 1973 as Popular Bank of Hialeah, Bradesco Bank passed through several hands before becoming what it is today. A Central American group developed it as BAC Florida, a tech-savvy, one-branch bank aiming to help clients in Latin America safeguard and invest their money in the U.S. Brazil’s Bradesco bought it in 2020 for roughly $500 million and renamed it, offering customers in Brazil an integrated channel for U.S. savings and investment. Longtime Brazilian banker Lima led the acquisition and moved to Florida four years ago to helm the U.S. operation.
Today, Lima says some 80 percent of Bradesco Bank’s clients are international. Growth comes largely from Brazil, where owner Bradesco has more than $340 billion in assets, nearly 4,000 branches, and commonly ranks as the third-largest bank in South America. “The driving force that brought us here was Brazil,” says Lima. “But the addressable market is Latin America. And of course, we’ll continue domestic banking, given the large population of Latin Americans in the U.S., especially here in Florida.”
BANKING DIFFERENCES BETWEEN THE U.S. AND BRAZIL
Doing business in the U.S. is not the same as in Brazil, Lima has learned. While banking regulations are similar, the marketplaces differ. For one thing, the U.S. banking industry is highly fragmented. Brazil hosts fewer than 200 banks, while the U.S. has more than 4,000. That’s partly because Brazil uses a centralized, federal system while the U.S. relies heavily on states to approve banks. “That fragmentation means a lot of opportunity for U.S. banks like ours, because there’s so much room for consolidation,” Lima says.
Technology for payments also differs. Decades back, when Brazil suffered hyperinflation, Brazilian banks adopted the latest digital technology to move money quickly to help retain its value. Banks in Brazil have continued to update payment systems, while the U.S. still relies on older technologies, which often mean three to five days for a U.S. bank to pay a credit-card bill for a client, says Lima. “In Brazil, you can’t pay with a check by mail,” he says. Instead, since 2020, there’s a single Brazilian online payment system available 24/7 for free. Created by Brazil’s Central Bank, the Pix system allows instant and secure payment between bank accounts and e-wallet platforms. It’s everywhere in the nation of some 215 million people, unlike the private U.S. Zelle platform that connects only accounts in banks.
SOUTH FLORIDA AS A BANKING HUB
Bradesco is not alone among Latin American banks entering the U.S. market by purchasing a Florida bank. In 2011, Brazil’s Banco do Brasil bought Coral Gables-based Eurobank for $6 million, helping build what’s now BB Americas Bank. In 2015, Chile’s Banco de Credito e Inversiones (BCI), bought Miami-based City National Bank of Florida for nearly $1 billion in the biggest U.S. acquisition ever by a Chilean company. City National in turn bought Miami-based Totalbank for more than $500 million in 2018.
Those purchases bolster South Florida’s ranking as the second largest international banking hub in the U.S., trailing only New York in terms of the number of international banks, volume of financial activity, and number of foreign customers, says David Schwartz, president of the Financial and International Business Association (FIBA). “We are the gateway to Latin America, so this is where they come,” says Schwartz.
Bradesco Bank in Florida is expanding in wealth management. The bank’s investment affiliate now has some $5 billion in assets under management, up more than four-fold since 2020. Initially focusing on clients with a minimum $1 million portfolio, it’s now accepting customers with smaller portfolios, “providing a more digital offering,” says Lima, and looking at their longer-term potential. Latin American investors, who used to invest conservatively in U.S. fixed-rate instruments such as bonds, are now diversifying into stocks, mutual funds, and alternative instruments, “reducing the gap from investor trends in more mature markets,” says Lima.
From Florida, Bradesco Bank also has overseas banks as clients. It regularly holds deposits for Central American banks that keep U.S. dollar accounts to make U.S. payments. All those activities require regularly updating technology, the feature that has helped distinguish and grow the one-branch bank so far. “You have to think long-term,” says Lima. “If your vision is to maximize returns very short-term, you’re not going to prepare the bank for where we need to be in five or 10 years.”
