Diversificação das fontes de receitas e performance bancária na crise da Covid-19

Abstract

This research aims to investigate how bank revenue diversification is related to the performance of Brazilian banks in the face of the COVID-19 crisis. The literature shows that the diversification of banking revenues between interest and other services can contribute to a better performance of commercial banks and multiple banks with commercial portfolios. Thus, the first objective of the research is to test whether this relationship is valid for the Brazilian market. Then, considering that the performance of banks is sensitive to periods of crisis, the second objective is to test whether, during the crisis of the COVID-19 pandemic, this relationship intensified, as diversification is expected to be particularly important in times of recession. Finally, as some studies show significant differences in the performance of large banks compared to smaller ones, the third objective of the research is to analyze whether the relationships studied in the previous objectives are different for large banks relative to others. We used data from the quarterly financial statements of Commercial Banks, Multiple Banks with Commercial Portfolios and Caixa Econômica registered with the Central Bank of Brazil (Bacen) during the periods from 2018-Q1 to 2021-Q3. We measured banking performance by the net margin and return on equity, including as controls the banks' realized risk, operating efficiency, economic capital level and size, in addition to firm fixed effects and the average Selic rate in each quarter. The results show that, in general, higher revenue diversification is related to better performance. For the net margin, this relationship does not change when we control for the period of the pandemic and, in the case of the return on equity, it ceases to exist, also showing a lower return during the pandemic. Finally, these relationships remain the same after controlling for the effect of large banks compared to others. This research contributes to the literature that analyzes banking performance and the economic effects of the COVID-19 pandemic. In addition, the results are important for managers of Brazilian banks, as they provide subsidies for the effect of diversifying revenue sources in times of crisis, such as the COVID-19 one