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Subnational government banks profitability in Brazil between 2003 and 2019

Author

Listed:
  • Daniel Diniz Oliveira
  • Lauro Gonzalez
  • Tiago Couto Porto

Abstract

The role of public banks in the economy has been extensively discussed in the literature.Within this debate, one of the primary criticisms of these financial institutions istheir lower profitability compared to private peers. In Brazil, the subnational commercialgovernment-owned banks remain one of the least studied bank categories, particularly followingthe financial crises they encountered in the 1980/90s. This article aims to empiricallyinvestigate the effect of the subnational government-owned control on banks’ performancein a more recent timeframe. Contrary to the conventional literature, the results provide evidencethat this control positively impacts profitability. JEL Classification: G21; G32; L30.

Suggested Citation

  • Daniel Diniz Oliveira & Lauro Gonzalez & Tiago Couto Porto, 2025. "Subnational government banks profitability in Brazil between 2003 and 2019," Brazilian Journal of Political Economy, Center of Political Economy, vol. 45(3), pages 421-443.
    • Handle: RePEc:ekm:repojs:v:45:y:2025:i:3:p:421-443:id:2513
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    File URL: https://centrodeeconomiapolitica.org.br/repojs/index.php/journal/article/view/2513/2441
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    More about this item

    Keywords

    Subnational government banks profitability; government banks profitability; development emerging economies; Brazilian banking system;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General

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