The Impact of the IFRS 9 on the Loan Loss Provision of Brazilian Banks

Autores

  • Adolfo Henrique Coutinho e Silva Universidade Federal do Rio de Janeiro (UFRJ)
  • Ana Paula Elias de Oliveira Banco Central do Brasil

Resumo

In Brazil, the IFRS 9 will introduce a new criterion and we do not know whether it will result in equal, greater, or lesser levels of loan loss provision than those applied by local standards, and there are few studies with empirical data on this issue in Brazil. This research discloses possible regulatory impacts before they occur in Brazil and highlights relevant points regarding the adoption of the new international standard to the accounting framework that is used for calculating the prudential capital. So, the main objective of this paper is to investigate the IFRS 9 impact on loan loss provision of Brazilian banks in the first years of the new standard application. We perform a difference-in-differences estimation for a sample of 34 Brazilian banks in the period from 2014 to 2019. The results revealed that there was an increase in the average level of loan loss provision in the statements that follow the international accounting standard in the period, however, the results demonstrated that this increase could not be explained by the normative change from IAS 39 to IFRS 9. In this context, the present study contributes to the debate on the adoption of the IFRS 9 with empirical evidence of the behavior of Brazilian banks given the recent regulatory change. We present three important practical insights. First, with the reduction of the differences between the loan loss provision levels of the two methods, the implementation of a single methodology seems to be a feasible goal. Second, the significant size difference between Brazilian banks deserves attention from the regulatory body. Third, the introduction of the IFRS 9 standard will bring new challenges for prudential regulation due to changes in the existing regulatory monitoring system.

Biografia do Autor

Adolfo Henrique Coutinho e Silva, Universidade Federal do Rio de Janeiro (UFRJ)

Professor de Auditoria e Contabilidade da UFRJ. Auditor Interno do BNDES.

Ana Paula Elias de Oliveira, Banco Central do Brasil

Analista do Banco Central do Brasil (BCB) e Mestre em Ciências Contábeis na UFRJ – PPGCC/UFRJ

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2024-12-17

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Silva, A. H. C. e, & Oliveira, A. P. E. de. (2024). The Impact of the IFRS 9 on the Loan Loss Provision of Brazilian Banks. Revista De Contabilidade Do Mestrado Em Ciências Contábeis Da UERJ, 29(3), 69–83. Recuperado de https://www.e-publicacoes.uerj.br/rcmccuerj/article/view/87608

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