Reporting issues and opportunities for banks
Annual reports in the banking industry are increasingly burdened with detailed financial data, which isn’t translating to increased public and shareholder trust. By building on recent — largely positive — financial disclosure enhancements, banks can work to eliminate overlapping disclosures and better draw out the most relevant financial information. This could serve as a first step to not only restore and maintain trust through coherent business reporting, but also reduce the potential for further tightening of disclosure obligations.
The opportunity to increase shareholder trust lies in aligning the report more closely with a bank’s own business model and individual short-medium and long-term prospects. To successfully convey how the changes banks are making to their business models are helping to protect and develop shareholder value, banks must move beyond data tables and build an integrated reporting structure.
Linking annual report earnings with financial risk reporting
Risk decisions in financial services have an immediate impact on financial performance and therefore offer essential context to understand current earnings. Financial services regulators, securities regulators and industry working parties have all significantly improved risk reporting obligations, but there is often an information gap in what this information means for business performance. Linking risk reporting with earnings performance could help shareholders compare profitability across banks with different strategies.
Post-crisis reporting developments