1 7th WCSA Conference, Rio de Janeiro, January, 5-6 2017.An Analysis on the Composition of Revenue of Brazilian Banks ( ) Marcelo Gonçalves do Amaral, Arlindo de Oliveira Freitas, Anderson Nunes Fraga, Fabiana Moyses, Ariela Sol do Amaral, Maria Clara Martins de Souza 7th WCSA Conference, Rio de Janeiro, January,
2 Financial services most used in BrazilData from 2014
3 Assumption/HypothesisCurrently, the biggest gains come from service fees provided by banks There are many banks competing for a market share
4 What is the main source of revenue of the Brazilian banking sector?Research question What is the main source of revenue of the Brazilian banking sector?
5 Secondary objectives Carry out a bibliographical research on the subject Improve the knowledge about the Brazilian Financial System Map the current/recent economic scenario To comprehend how to read Statement of Results Carry out a brief description of the 6 largest banks in Brazil today, and Check the main sources of revenue and the composition of financial sector profits
6 Literature review Brazilian financial system Structure InstitutionsBrazilian financial system Structure Institutions Evolution Economic scenario Mergers & Acquisitions Strong concentration Digital payment methods / Finthecs Economic indicators Grow from Crises in 1999 and 2014
7 Methodology Population/Sample 2. About the tools6 biggest banks US$ 2 trillions in assets 2. About the tools - Statement of results 3. Data collection and treatment From 1996 to 2014 Limitations - Some data are not available or has different organization (condensed)
8 Case studies’ structurePrivate Brazilian banks Banks’ revenue Data collection 2. Individual analysis The actors and its evolution Revenue composition 3. Revenue analisys Private transnational banks Public banks
9 Analysis of the banking sectorTotal of assets Net assets Net profit Revenue from operations Revenues with treasury bonds Revenues with services and fees Historic dataset from 1996 and 2014 Selected years 1996 (after banking reforming), 2005 (10 years) and 2014 (last data available) accounts opened in the period Obs.: in 2016 Bradesco bought HSBC
10 Bank’s revenue evolution (selected years)Credits operations Treasury/Bonds Services/fees
11 Findings Revenues of credit operations has the highest participationFollowed by the results of the transactions with real estate bonds and by the receipt of services and fees. The revenue of the banks increased even in times of recession Either by the rising of interest rates, by increasing the number of customers, or by the growth of bank fees. This expansion has contributed to keeping the profits high as reached by banks even after the decrease of the gains of income resulting from inflation. Although the high concentration, the competition for market share is high. The revenues from services and fees increased by 9.7%, from June/2013 to June/2014. Although fees are a secondary source, they represent 10% of the total revenues.
12 Final remarks In the last 2 decades, many changes have occurred in the country and in the banking sector, being the main one currency stability. The way of banks earning revenue has also changed. However, unlike the hypothesis raised, the revenues of fees and services provided are not their biggest source. The revenue from services and fees were and are a way for financial institutions to maintain their profitability in recession periods.
13 References ARAUJO, C.A.G. Estratégia de Fusão e Aquisição Bancária No Brasil: Evidências Empíricas Sobre Retornos. Revista Contemporânea de Economia e Gestão, 5(2), jul-dez/2007. ANDREZO, A.F.; LIMA, I.S. Mercado Financeiro: Aspectos Históricos e Conceituais. São Paulo: Pioneira Thomson Learning, 2001. BESSA, S. Contabilidade. 2ª Ed. Rio de Janeiro: Fundação Getúlio Vargas, 2010. CAMASMIE, R. Os Bancos No Plano Real. Rio de Janeiro, Monografia, Curso de pós-graduação em finanças e gestão empresarial, UCAM, Rio de Janeiro, 2004. CARDOSO, L.S. Sistema Financeiro Nacional: As Vantagens da Implantação do Novo Sistema de Pagamento Brasileiro. Monografia, UNESC, Criciúma, 2012. COLLI, J.A. Contabilidade Bancária. Ed. Atlas. São Paulo, 1996. DIEESE. Desempenho dos Bancos. São Paulo: Departamento Intersindical de Estatística e Estudos Socioeconômicos, 2014. FEBRABAN. Pesquisa FEBRABAN de Tecnologia Bancária FEBRABAN, 2013. FREITAS, O.D. Estudo sobre as tarifas bancárias. Monografia, Graduação em Administração, UFRGS, Porto Alegre, 2008. GREGORIO, G. Bancos no Brasil. Disponível em Acesso em: 01/10/2014. HAWKINS, J.; MIHALJEK, D. The banking industry in the emerging markets economies: competition, consolidation, and systemic stability. BIS Papers no. 4, 2001.
14 References MARTINS, C. O Sistema Bancário Nacional Brasileiro e as influências da crise financeira mundial de Monografia, Graduação em Ciências Econômicas, UFSC, Florianópolis, 2010. MOYSES, F. Setor Bancário Brasileiro: Uma Análise da Composição das Receitas dos Seis Maiores Bancos Após o Plano Real. Monografia, Pós-Graduação em Controladoria e Finanças, UFF, 2014. NIYAMA, J.K.; GOMES, A.L.O. Contabilidade de instituições financeiras. 2º ed. São Paulo: Atlas, 2002. NETO, A. Mercado financeiro. 10º ed., São Paulo: Atlas, 2011. OLANREWAJU, T. The rise of the digital bank. Londres, McKinsey & Company. Disponível em
15 Thanks!! Maria Clara Martins [email protected] triplehelixbrasil.blogspot.com Thanks!!