The Monetary Board has approved the amended guidelines on the presentation of annual report of banks and quasi-banks (QBs). The move is aimed at enhancing market discipline aligned with international best practices.
Under the revised rules, banks and QBs are required to disclose in their annual reports significant information concerning their financial condition, performance, ownership and governance. This will enable the public and market participants to better understand the true condition of the bank and QB.
BSP Officer-in-Charge Nestor A. Espenilla, Jr. said “The initiative is an important step to promote greater disclosure and transparency. This paves the way for the public and market players to access material information before decisions are made.”
All banks and QBs except foreign bank branches are now required to publish their annual reports. This is a departure from previous guidelines which anchored the requirement on the type and asset size of the bank.
The annual report includes discussion and analysis of the bank and QB’s corporate policy, financial highlights, financial condition and results of operation. It also provides information on the bank and QB’s risk management and corporate governance framework. Banks and QBs with complex business segments will be required to disclose more granular information.
The approval of the Monetary Board will apply to annual reports for the financial year 2017 effectively giving banks and QBs adequate transition to the new requirement.