Reporting Income Taxes in the Banking Sector In Angola - Accounting, Tax Regulation and Financial Reporting Evidences

This research provides an insight into income taxes reporting in Angola, based on hand collected data from the annual reports of banks. Empirical studies on Angolan companies are scarce, in part due to the limited access to data. The results show that income taxes’ reporting has improved over the years 2010-2013, becoming more reliable and understandable. The Angolan Government is boosting the economic growth through tax benefits in the investment in public debt, which cause a reduction in the banks’ effective tax rate. The new income tax law will reduce the statutory tax rate from 2015 onwards and change the taxable income, resulting in shifting the focus to promoting private investment.

The compliance function in banking: Perspective and future in the age of globalization

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

Rethinking the Portuguese banking sector in a post-crisis context

As the financial crisis hit the Portuguese banks, the profitability of the whole sector squeezed to historical minimums. Reinventing the banking business model in the post-crisis context is an overriding issue to achieve sustainable profits and a low cost-to-income ratio. We propose banks to adopt a true multichannel approach, proceeding to a branch network reformatting and a relocation of services to online channels; adopt a true customer-centric approach and reduce the product and services portfolio complexity; finally, industrialize operations and rationalize the structure. With these measures in place, Portuguese banks will become leaner and more efficient, aspiring to a cost-to-income ratio below 45%.

Predictability of stock market returns: Evidence from Eurozone's banking sectors

This paper analyzes the in-, and out-of sample, predictability of the stock market returns from Eurozone’s banking sectors, arising from bank-specific ratios and macroeconomic variables, using panel estimation techniques. In order to do that, I set an unbalanced panel of 116 banks returns, from April, 1991, to March, 2013, to constitute equal-weighted country-sorted portfolios representative of the Austrian, Belgian, Finish, French, German, Greek, Irish, Italian, Portuguese and Spanish banking sectors. I find that both earnings per share (EPS) and the ratio of total loans to total assets have in-sample predictive power over the portfolios’ monthly returns whereas, regarding the cross-section of annual returns, only EPS retain significant explanatory power. Nevertheless, the sign associated with the impact of EPS is contrarian to the results of past literature. When looking at inter-yearly horizon returns, I document in-sample predictive power arising from the ratios of provisions to net interest income, and non-interest income to net income. Regarding the out-of-sample performance of the proposed models, I find that these would only beat the portfolios’ historical mean on the month following the disclosure of year-end financial statements. Still, the evidence found is not statistically significant. Finally, in a last attempt to find significant evidence of predictability of monthly and annual returns, I use Fama and French 3-Factor and Carhart models to describe the cross-section of returns. Although in-sample the factors can significantly track Eurozone’s banking sectors’ stock market returns, they do not beat the portfolios’ historical mean when forecasting returns.

Understanding the internet banking adoption by Portuguese customers - a unified theory of acceptance and use of technology and perceived risk application.

Trabalho de Projeto apresentado como requisito parcial para obtenção do grau de Mestre em Estatística e Gestão de Informação

The impact of the European sovereign debt crisis on the recovering from the financial crisis: Equity returns of the banking sector

This paper analyses, through a dynamic panel data model, the impact of the Financial and the European Debt crisis on the equity returns of the banking system. The model is also extended to specifically investigate the impact on countries who received rescue packages. The sample under analysis considers eleven countries from January 2006 to June 2013. The main conclusion is that there was in fact a structural change in banks’ excess returns due to the outbreak of the European Debt Crisis, when stock markets were still recovering from the Financial Crisis of 2008.

Portuguese banks and the economic adjustment programme: balance sheet adjustments and impact on profitability

Double Degree. A Work Project presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics and a Masters Degree in Finance from Louvain School of Management

The establishment mode choice of German multinational enterprises in Brazil: A comparative approach

We examine the drivers behind the establishment mode choice of German multinational enterprises (MNEs) in the sectors of Automotive, Chemicals and Mechanical Engineering in Brazil for the years 1993-2013 using a novel sample of primary data obtained directly from German MNEs. Based on prevalent theories found in the literature, we test the most common hypotheses on our sample. Firms with high R&D activities and firms with prior market knowledge in Brazil in from of previous sales offices are more likely to enter Brazil by a Greenfield investment. We also show that it is the specific private ownership of the German so-called hidden champions that drive those specific SMEs to enter Brazil by Greenfield, a sneaking suspicion that has been made before. Finally, we show that the establishment mode choice between Brazil and the USA only deviates to a low extent, with German MNEs preferring to enter Brazil by Greenfield and the USA by M&A. Thereby, we provide valuable insights for future research in this field.

The role of income inequality on fiscal multipliers

A Work Project, presented as part of the requirements for the Award of a Masters Double Degree in Economics from the Nova School of Business and Economics and University of Maastricht

The Impact of income support programs on transitions to employment

The income support programs are created with the purpose of fighting both, the poverty trap and the inactivity trap. The balance between both is fragile and hard to find. Thus, the goal of this work is to contribute to solve this issue by finding how income support programs, particularly the Portuguese RSI, affect transitions to employment. This is made through duration analysis, namely using Cox and Competing Risks models. A particular feature is introduced in this work as it incorporates the possibility of Defective Risks. The estimated hazard elasticity with respect to the amount of RSI received for individuals who move to employment is -0,41. More than a half of RSI receivers stays for more than a year and the probability of never leaving to employment is 44%. The results appear to indicate that RSI has affected negatively transitions to employment.

Home Banking

The object of this dissertation is focused on the study of the home banking service and how the allocation of losses due to computer fraud is processed in the scope of this service. When considering the questions raised by the allocation of losses associated with fraudulent operations, it is important to consider, mainly, the behaviour of the user of the home banking service. In our opinion, courts have been too demanding towards the user when judging his action in the use of this service. In this study, we have concluded that, when the user “falls” into a computer fraud scheme, he should not be liable for gross negligent behaviour, even if, due to the fraud, the user revealed all his access codes to a hacker on a page similar to that of his bank. In general, such facts will not be sufficient to qualify the user’s action as grossly negligent. Therefore, the user, under the terms of the Payment Services’ System, must bear the loss up to a maximum of €150, and the bank will face the remainder of the losses. However, if the user, victim of a fraudulent technique, ignored the safety warnings issued by the bank, one must consider, given the specific case, that he contributed to gross negligence in unauthorised payment transactions. Thus, the user must bear all the losses up to the moment when he notifies the bank about the unauthorised transactions. It is the bank’s responsibility to, given the specific case, adduce evidence of the client’s contribution to the identified losses.

Search-for-yield in Portuguese fixed-income mutual funds and monetary policy

This paper studies the effects of monetary policy on mutual fund risk taking using a sample of Portuguese fixed-income mutual funds in the 2000-2012 period. Firstly I estimate time-varying measures of risk exposure (betas) for the individual funds, for the benchmark portfolio, as well as for a representative equally-weighted portfolio, through 24-month rolling regressions of a two-factor model with two systematic risk factors: interest rate risk (TERM) and default risk (DEF). Next, in the second phase, using the estimated betas, I try to understand what portion of the risk exposure is in excess of the benchmark (active risk) and how it relates to monetary policy proxies (one-month rate, Taylor residual, real rate and first principal component of a cross-section of government yields and rates). Using this methodology, I provide empirical evidence that Portuguese fixed-income mutual funds respond to accommodative monetary policy by significantly increasing exposure, in excess of their benchmarks, to default risk rate and slightly to interest risk rate as well. I also find that the increase in funds’ risk exposure to gain a boost in return (search-for-yield) is more pronounced following the 2007-2009 global financial crisis, indicating that the current historic low interest rates may incentivize excessive risk taking. My results suggest that monetary policy affects the risk appetite of non-bank financial intermediaries.

Banking crises: The impact of financial liberalization

This paper intends to study whether financial liberalization tends to increase the likelihood of systemic banking crises. I used a sample of 79 countries with data spanning from 1973 to 2005 to run a panel probit model. I found that, if anything, financial liberalization as measured across seven different dimensions tends to decrease the probability of occurrence of a systemic banking crisis. I went further and did several robustness tests – used a conditional probit model, tested for different durations of liberalization impact and reduced the sample by considering only the first crisis event for each country. Main results still verified, proving the results’ robustness.

Portuguese commercial banking: An assessment of competition in the 1960-2013 period

Strong consolidation is one of the most evident developments of banking markets around the world in recent decades. This change is raising questions on how and to what an extent competition is affected by the expansion of the largest banks. The aim of the present study is to measure the degree of competition in the Portuguese commercial banking market in the long-run, during the period ranging from1960 to 2013, by using the non-structural model developed by Panzar and Rosse. The main findings are that the Portuguese banking system, despite the legal restrictions in place, operated mostly in a market with some degree of competition and, at some points in time, presented some interesting competitive features. More recently, it has evolved into functioning as a cartel.

Comprehensive income: evidence from Portuguese listed companies on reporting choices and value relevance

This work project aims at analysing choices related to Comprehensive income (CI) of Portuguese listed firms and understanding the reasons behind them. Additionally, it studies the relevance of CI versus Net Income (NI). It was found that firm’s size and volume of Other comprehensive income (OCI) are positively related with the choice for separate statements while smaller firms with positive NI and negative OCI tend to disclose less information about taxes. The value relevance of CI proved to be superior to that of NI but OCI seems to have no incremental value relevance.