Brazilian Financial Institutions Research Articles

Which banks’ business operations are more risky? The impact of leverage on Brazilian financial institutions

We analyse the effect of leverage components and banks’ ‘business model channels’ on risk-taking for Brazilian banks. Using a detailed dataset from the Brazilian financial system, the results show that the measurement of leverage components is relevant for determining banks’ risk. We highlight two important findings. First, we provide novel insights for the design of a generalised method of moments (GMM) estimation using external instruments. Second, the derivative and on-balance-sheet operations are risky for investment and foreign banks. These results provide important information for banking supervision and regulation and bring new insights regarding banks’ leverage behaviour.

A comparative analysis of efficiency in the Brazilian banking sector: A data envelopment analysis approach

This work aims to analyze the efficiency of Brazilian financial institutions until the COVID-19 pandemic period, from production and profitability perspectives. To accomplish this, the data envelopment analysis (DEA) techniques, specifically the CCR and BCC models, are applied to 213 Brazilian financial institutions in four methodological stages. The first step involved conducting a literature review of similar studies. The second step consisted of gathering financial information for each bank through the website of the Central Bank of Brazil. The third step involved selecting the variables to be used in the models. The fourth step was outlier detection using the jackstrap method. Subsequently, the mentioned efficiency models were applied, and the most efficient banks were identified based on each perspective. The results identified heterogeneous groups of efficient banks based on different market segments, with a focus on the efficiency of large banks and public banks when considering the production-oriented perspective. It is also observed that new digital banks are among the banks considered efficient. These findings are valuable for the scientific literature investigating the sustainability of financial institutions, as well as for decision-makers seeking to make more efficient investment allocations and for banking supervisory authorities in formulating risk regulatory policies.

Digital Banks in Brazil: Struggling to Reach the Breakeven Point or a New Evolution Wave?

Digital banks have profoundly changed the financial industry’s operations. In this scenario, the study of digital banks has gained increasing attention in the academic community. However, there is still a lot of room to understand how this type of organization functions and impacts different contexts. Considering the information collected, partial findings, and the professional experience of those involved in a larger research project, the main objective of this study is to present the Brazilian scenario related to digital banks from the analytical perspective of the research group. The methodological approach included analysis of partial results of a larger research project, bibliographic research, analysis of public data about digital banks in Brazil, and multidisciplinary discursive approach to conduct debates with the support of academic literature and experience from top managers working in major Brazilian financial institutions. Data on key performance indicators (KPIs), including cost breakdown, net revenue, return on equity (ROE), and cost-to-income ratio, are presented and analyzed for both traditional and digital banks. Furthermore, this study puts forward potential avenues for future research within three main research domains: digital operational efficiency for banks, customer attraction strategies employed by digital banks, and the utilization of digital financial services in the retail industry.

The impact of fintechs on the bank spread

This article analyzed the impact of fintechs on the Brazilian financial industry. We focus on the Market Share indicators of the main institutions from Brazilian bank system. Moreover, we observe if it is enough to trigger a decline in Brazilian bank spread. Using data provided by IF.Data system from Central Bank of Brazil, quarterly financial data of all Brazilian financial institutions from 2010 to 2018 were collected. It resulted in a database of about 57,000 observations. The empirical outcomes indicated that, despite the insertion of new competitors, the concentration of credit and investment in the six largest Brazilian banks remains above 80% without loss of spread in the period observed.

On the relation between sustainability report and assurance standards in Brazilian financial institutions

On the relation between sustainability report and assurance standards in Brazilian financial institutions

Toward enhanced excellence in Brazilian investment firms: the role of investors' personality assessment tools

PurposeThis research aims to investigate how personality, identified through the psychological type, can contribute to a more robust process of identifying the investor's profile. The traditional process of investor profile analysis of Brazilian financial institutions is performed through a form in which basic information is required to define the profile. By adding psychological and behavioral aspects obtained through the Myers–Briggs type indicator (MBTI) typology, institutions participating in the financial and capital markets could enrich the understanding of their clients.Design/methodology/approachIt presents a quantitative approach, with an exploratory-descriptive focus, with a survey carried out on a sample of 613 investors, in which nonparametric tests were performed to test hypotheses on the influence of personality on the behavioral aspects of these investors.FindingsThe results showed a relationship between the dimensions of the personality type and the investment profile, indicating that personality is a relevant factor in guiding investor behavior. In this context, evidence of the applicability of the principles of behavioral finance to investor behavior was found, to the detriment of traditional finance principles.Practical implicationsFindings help investors to plan and manage their finances more appropriate manner. Financial institutions can create more accurate and realistic investor profile analysis processes, adding psychological and behavioral aspects obtained through the MBTI typology. In this way, companies and financial advisors will be able to provide a better-quality service to their clients, recommending the most appropriate investment strategies.Originality/valueThe elements originality of this study are as follows: (1) methodology: there is a lack of research covering the application of personality assessment tools, particularly the MBTI, to improve investor's profile analysis; (2) geographical coverage: lack of research of the theme in Brazil and Latin America in general; (3) robustness of the database.

Impactos da adoção das international financial reporting standards (IFRS) nos indicadores econômico-financeiros de instituições financeiras brasileiras

O objetivo desta pesquisa é avaliar os impactos da adoção das IFRS (IAS 7, IAS 19, IAS 32 e IAS 39) nos indicadores econômico-financeiros de instituições financeiras brasileiras, por meio dos indicadores de solvência, estrutura patrimonial e de captação, e de rentabilidade. O método utilizado foi comparar os resultados referentes ao ano de 2009 e que tiveram suas demonstrações financeiras publicadas de acordo com as normas BR GAAP e IFRS. Foram comparadas as médias de cada um dos indicadores econômico-financeiros, calculados em ambos os padrões contábeis e para identificar se as diferenças encontradas eram significativas foi aplicado o teste Mann Whitney. Como teste de robustez foram comparadas as proporções de variações positivas e negativas dos indicadores analisados e para identificar se as diferenças eram significativas foi aplicado o teste chi-quadrado. Os resultados encontrados sugerem que o ajuste ao valor recuperável de empréstimos e adiantamentos e o ajuste ao valor justo de ativos financeiros influenciaram para que a carteira de crédito e o patrimônio líquido das instituições financeiras analisadas apresentassem de maneira geral valores maiores quando demonstradas em IFRS, o que elevou os indicadores Independência Financeira; Empréstimos/Depósitos e reduziu os indicadores Alavancagem; Participação dos Empréstimos; Retorno sobre o Patrimônio Líquido. Não foi possível constatar nenhuma diferença significativa, provavelmente devido a pequena amostra trabalhada. Esta pesquisa pretende ter contribuído para aprimorar o entendimento dos impactos do processo de convergência da contabilidade das instituições financeiras brasileiras, que por muitas vezes são excluídas das pesquisas por suas particularidades, para o padrão internacional; bem como, para auxiliar os gestores de negócios e os usuários da informação financeira, especialmente aqueles oriundos do mercado de capitais, as autoridades reguladoras e a academia.

Influência da crise financeira de 2008: uma análise sobre a tecnologia da informação dos maiores bancos do consolidado financeiro brasileiro (2001-2016)

Este artigo tem por intuito analisar os efeitos da tecnologia de informação (TICs) sobre a funcionalidade no sistema financeiro brasileiro baseando-se na abordagem Pós-Keynesiana e Neo-Schumpeteriana. A partir da abordagem Pós Keynesiana, buscou-se identificar as contribuições das TICs nos fatores de produção no sistema bancário, como a seleção de variáveis estratégicas dos bancos brasileiros no período de recessão. Por intermédio da metodologia de análise de dados em painel , durante os anos de 2001 a 2016, obteve-se resultados que captaram os efeitos e a repercussão da crise de 2008 sob o sistema bancário brasileiro. A partir dos principais resultados da estimação observou-se que o valor da sensibilidade das inovações financeiras foi superior ao fator de produção trabalho e, durante o período, a criação de inovações financeiras representou maior relevância quanto aos aspectos da redução de custos pelas instituições financeiras brasileiras sob análise.

The Relationship between the Technology Readiness Index (Tri) and the Quality of Digital Services of Brazilian Financial Institutions

This study aims to identify the technological readiness variables associated with the quality perceived by customers who use digital services offered by banking institutions operating in Brazil. Descriptive quantitative research, in cross-section, with a sample of 958 clients of financial institutions operating in Brazil. The data were analysed using Structural Equation Modelling and multigroup analysis using SmartPLS. Given the growth of Fintech driven by disruptive technologies, traditional banking segments are looking for a competitive advantage to retain their customers. The findings showed that optimism and innovativeness have a positive influence on perceived quality. In contrast, discomfort with functional and physical risk, discomfort with embarrassment, and insecurity with information have a negative influence on perceived quality. Insecurity due to lack of contact does not influence the quality perceived by customers. There are also no differences regarding the gender and income of customers and the type of bank with whom they have a relationship, only in the group between public and private banks in the relationship between innovativeness and perceived quality. However, the explanatory power of the model indicates that other factors also impact this relationship. Although Fintech is growing at an accelerated pace, traditional bank customers seek other factors that impact perceived quality. In this way, it shows that traditional banks can consider other organisational actions to retain customers in addition to disruptive technologies.

Determinantes da evasão fiscal em instituições financeiras: evidências do Brasil e dos Estados Unidos

O presente artigo analisa os determinantes da evasão fiscal em instituições financeiras. Foram analisadas, inicialmente, 131 instituições financeiras brasileiras e 2.886 instituições financeiras americanas do período de 2008 a 2017, perfazendo 28.590 observações. Foram calculadas as duas principais métricas de agressividade fiscal presentes na literatura nacional e internacional (Book-Tax Differences - BTD e Cash ETR). Utilizaram-se quatro estratégias econométricas: Método dos Mínimos Quadrados (MQO), Efeitos Fixos, Efeitos Aleatórios e Método Generalizado de Momentos Sistêmico (GMM-Sis). Foi constatado que para a amostra do Brasil, há algumas evidências de que intangíveis, tamanho e retorno sobre ativos (ROA) são alguns determinantes da evasão fiscal . Para a amostra dos Estados Unidos verificou que há algumas evidências de que tamanho e débitos totais são alguns determinantesda evasão fiscal. Um determinante em comum nas duas amostras é o tamanho. Esse resultado está alinhado com a literatura que prevê que empresas maiores têm mais condições de praticar evasão fiscal. Este estudo contribui para maior compreensão das práticas de planejamento tributário realizadas pelas empresas financeiras.

Socio-Environmental Responsibility Policy in Financial Institutions

This research intents to analyze the influence of Socio-Environmental Responsibility Policy of Brazilian’s Central Bank on financial institutions economic performance listed at the Brazilian stock exchange. The data was collected from diversified sources (websites, explanatory notes, reference form and Economatica® data base) from 2012 up to 2017. As sample, 22 financial institutions were considered for data collection and analysis. The results showed that the growth in shareholder’s equity and contingent liabilities have significant differences from the adoption of the Socio-Environmental Responsibility Policy. Considering six items of corporate governance and six items of risk management, no investigated institution presented all these mechanisms requested by Brazilian’s Central Bank. Brazilian’s financial institutions recognized a greater volume of liabilities and expenses after the implementation of such policy, which reduced their net equity. This research shed some lights in socio-environmental policies regarding corporate governance and risk management mechanisms. Objective: to analyze whether the adoption of a socio-environmental responsibility policy influences the performance indicators and the corporate governance and risk management framework of financial institutions listed on the Brazilian stock exchange. Method: Data were collected from the period 2012 to 2017, referring to 22 Brazilian financial institutions, which provided information to operationalize the variables. Results: the results showed that, from the performance indicators investigated, the growth in shareholders' equity and contingent liabilities presented significant differences as of the adoption of the socio-environmental responsibility policy. Twelve items were analyzed, six of which were corporate governance and six of risk management, noting that no investigated institution presented all the mechanisms provided by the Central Bank of Brazil. Contributions: the evidence suggests that Brazilian financial institutions began to recognize a greater volume of liabilities and expenses after the obligation to implement the socio-environmental responsibility policy, reducing their net equity. These results may be due to the improvement of the corporate governance structure and the adequacy of the risk management process.

Efficiency of the Brazilian Bitcoin: A DFA Approach

Bitcoin’s evolution has attracted the attention of investors and researchers looking for a better understanding of the efficiency of cryptocurrency markets, considering their prices and volatility. The purpose of this paper is to contribute to this understanding by studying the degree of persistence of the Bitcoin measured by the Hurst exponent, considering prices from the Brazilian market, and comparing with Bitcoin in USD as a benchmark. We applied Detrended Fluctuation Analysis (DFA), for the period from 9 April 2017 to 30 June 2018, using daily closing prices, with a total of 429 observations. We focused on two prices of Bitcoins resulting from negotiations made by two different Brazilian financial institutions: Foxbit and Mercado. The results indicate that Mercado and Foxbit returns tend to follow Bitcoin dynamics and all of them show persistent behavior, although the persistence in slightly higher for the Brazilian Bitcoin. However, this evidence does not necessarily mean opportunities for abnormal profits, as aspects such as liquidity or transaction costs could be impediments to this occurrence.

A Didactic Engineering for the development of the Amortization System theme using the HP 12C Calculator Emulator

This article is an excerpt from the master's research related to a Didactic Engineering with the theme of Constant Amortization System and French Amortization System for the development of didactic situations related to the content of Higher Education Financial Mathematics, and which allows the use of the HP 12C financial calculator emulator. Currently, these amortization systems are being used by Brazilian financial institutions for real estate financing. The objective was to investigate how students of Administration and Accounting apply the mathematical knowledge of amortization in situations by using financial calculators. The methodological approach followed the Didactic Engineering steps, both for the construction of the didactic sequence and for its application and validation. The results indicate that the elaborated didactic sequence contributed to the development of the proposed mathematical content, as well as handling and the ways of dealing with the financial calculators in situations involving the amortization calculations.

Fatores determinantes da política de dividendos das instituições financeiras brasileiras

Este artigo busca identificar os fatores determinantes da política de dividendos das instituições financeiras brasileiras, em uma amostra composta por bancos comerciais e bancos múltiplos com carteira comercial, listados na B3 no período de 2000 a 2017, totalizando 245 observações, utilizando dados em painel com efeitos fixos. Os resultados indicam que os fatores determinantes da política de dividendos são: Retorno sobre o Patrimônio Líquido, com efeito negativo e Concentração do Controle Acionário, com efeito positivo no payout. Os resultados indicam também uma preocupação com o efeito sinalizador dos dividendos e o papel dos dividendos em mitigar os problemas de agência.

Competitive Differences in Input-Factor Utilization among Brazilian Financial Institutions

Competitive Differences in Input-Factor Utilization among Brazilian Financial Institutions

Credit portability and spreads: Evidence in the Brazilian market

Credit portability is frequently advocated as a mechanism to foster competition in the banking industry, to lower spreads and to contribute to the development of financial intermediation. Yet there were no empirical studies that measured the effect of this policy on spreads. This article evaluates the effect of the portability resolution in the Brazilian credit market that was intended to facilitate borrowers to change from one financial institution to another whenever they have access to better credit conditions. By lowering switching costs, the portability resolution promotes competition among incumbent banks and consequently reduces credit spreads. Using difference-in-differences with matching estimation for 231 Brazilian financial institutions, we find that credit spreads for types of credit susceptible to portability become significantly lower than credit spreads for other types of credit that were not benefited by the new law.

As Instituições Financeiras Brasileiras Usam a PCLD para Gerenciamento de Capital?

Este estudo teve por objetivo verificar se as instituições financeiras brasileiras utiliza a parcela discricionária da Provisão para Créditos de Liquidação Duvidosa (PCLD) como instrumento de gerenciamento de capital. Para esse propósito, foram analisados os dados trimestrais de 2000 a 2015 dos 50 maiores conglomerados e instituições financeiras com atuação no Sistema Financeiro Nacional (SFN). Na realização dos testes empíricos foram estimados modelos com uso de dados em painel com efeitos fixos seccionais, sendo consideradas duas variáveis representativas do nível de capital: o Índice de Basileia, medida regulamentar de requerimento de capital; e uma proxy baseada em informações contábeis. A discricionariedade no reconhecimento da PCLD, por sua vez, foi definida como o valor provisionado para perdas acima do mínimo estabelecido na Resolução CMN nº 2682 (1999). Os resultados dos testes revelaram que não há evidências de que os bancos brasileiros utilizem a discricionariedade na constituição da PCLD para fins de gerenciamento de capital. Por outro lado, reforçaram as evidências de estudos anteriores, nacionais e internacionais, sobre o tema, no sentido de que as instituições utilizam essa discricionariedade na PCLD com o propósito de gerenciamento de resultados. Mesmo quando aplicado sobre as instituições financeiras consideradas “menos” capitalizadas, os testes também não confirmaram a hipótese de gerenciamento de capital. O estudo contribui para as discussões em curso no âmbito dos reguladores contábeis e bancários sobre o modelo atual de provisão para perdas de crédito.

Relation between the Market Risk and the Quality of Accounting Information for the Brazilian Financial Institutions

The study aimed to analyze the relationship between the market risk and the quality of accounting information of Brazilian financial institutions. The variables used in the study were: (i) volatility of the stock; (ii) quality of information accounting index through disclosure; (iii) size, profitability and debt. The survey sample consists of 55 organizations belonging to the financial segment of the BM&FBovespa. The results of multiple linear regression analysis demonstrated a significant compared to the proposed model with a power of explanation of 52.10%. The results converged to explain the study's assumption, resulting in a significant negative correlation between volatility and quality of accounting information, as well as volatility and size, and profitability. Starting from the main point, it is concluded that companies with a higher level of disclosure have lower volatility of stock returns, effecting thus cited and presumed importance attached by the market to the accounting information.

IT benefits management in financial institutions: Practices and barriers

The adoption of Benefits Management (BM) is important to ensure that information technology (IT) projects add value to the organization; however, the literature still lacks empirical evidence about how organizations are adopting IT BM. The aim of this study is to further investigate how IT BM is adopted in Brazilian financial institutions. A multiple case study approach was implemented at four leading financial institutions in Brazil by means of interviews, document analysis and a survey of 186 IT professionals. The study identified six practices affecting the adoption of IT BM (bonuses are linked to benefits, PMO is responsible for developing an organisational BM process, Net Present Value is used for selecting projects, goals are set before approval, executive committee approves projects, benefits are measured after deployments) and seven barriers to its adoption (difficulty adopting BM in agile projects, benefits are difficult to quantify, process is slow and bureaucratic, controlling costs/benefits are non-mandatory activities, lack of knowledge of BM, difficulty using techniques, resistance to new controls), some of which are newly identified. Finally, an action plan to resolve these issues is presented.

Comportamento dos bancos no twitter e seus efeitos sobre a imagem da marca

Currently, many organizations are using social media as tools of technology to enhance customer relationships and improve their results. In Brazil, the financial sector has used Twitter as a tool of information, communication and technology (ICT) to communicate communicating with their customers. The aim of this study is to understand how financial institutions are using social media, specifically the social network Twitter to develop the image of their brands. Therefore, we carried out a descriptive study in which we did a monitoring on Twitter of the corporate profiles and SAC (Customer Service) profiles from the five biggest Brazilian financial institutions. We analyzed the content of 1.080 Twitter messages of those financial institutions. It was found that there are differences in behavior when the institutions interact through the corporate profiles and SAC profiles. The study concludes by identifying the need of institutions adopt Twitter as a TIC tool in search of a more cohesive and aligned image with its goals. Moreover, we identified a different behavior between the private and public financial institutions in Brazil, both in relation to the use of Twitter for corporate profiles and Customer Service profiles.