The Performance of Brazilian Banks Post-Basel III Accord

• DOI: https://doi.org/10.22533/at.ed.2164142420062

• Palavras-chave: capitalization ratios and regulatory requirements; accounting indicators; large banks; smaller banks.

• Keywords: capitalization ratios and regulatory requirements; accounting indicators; large banks; smaller banks.

• Abstract: The Basel III Accord comprised a set of regulations proposed by the Basel Committee in 2010. It represented a response to the 2008 financial crisis, the outbreak of which revealed the weaknesses of the international financial system and highlighted the need to adopt criteria that would increase the resilience and soundness of banks, introducing changes related to their capital structure. In 2013, Brazil adopted the Basel III recommendations, however, from this period until 2021, the banking sector faced several challenges. Thus, the objective of this study was to study the performance of Brazilian banks, after the adoption of the Basel III Accord guidelines, in Q1 2010 to Q3 2021. The sample consisted of ten publicly traded banks, divided into two groups, Large and Small. The performance was obtained through the calculation of the indicators of cash generation and financial stability, profitability and profitability, capital structure and leverage and, finally, the capitalization and regulatory requirement ratios. Descriptive statistics were calculated and mean difference tests were applied. The tests showed that the performance of the groups was statistically different in the case of the following indicators: voluntary inflow, quick liquidity, return on equity, average financial independence, capital/depositor ratio and fixed assets ratio. The same result was not observed with the loan/deposit ratios, the return on total assets, the leverage and the Basel ratio. It was concluded that the institutions are solvent and able to bear the risks of the business.