Bank Disclosure Research Articles

International Financial Reporting Standards [IFRS] and Corporate Governance: A Survey of Nigerian Deposit Money Banks [DMBs

The study examined the effect of the International Financial Reporting Standards [IFRS] implementation on the corporate governance of Nigerian banks. The specific objectives of the study were to examine the effect of IFRS implementation in promoting corporate accountability by banks; the effect of IFRS implementation in strengthening the financial regulatory framework of banks and the effect of IFRS implementation in enhancing corporate disclosure of banks. The study adopts the descriptive survey research design. The sample comprised 144 respondents in banks in the chosen geographical area. The results showed that IFRS implementation promoted corporate accountability in Nigerian banks. There is a significant effect of IFRS implementation in strengthening the financial regulatory framework of banks. Lastly, IFRS implementation has enhanced the corporate disclosure of banks. The study recommends that CBN should further enact rules that promote accountability in the banking sector. Stiff penalty for late default on issuing annual reports, not allowing any single individual to acquire more than 20% shareholding, among others. The sustainability disclosure guideline by the NSE to promote corporate social responsibility among quoted companies should also be enforced for banking institutions. The harmonisation of the diversified corporate governance codes should be further revisited. A clear distinction between the duties and responsibilities of the CBN and FRC may further avoid overlap of functions which may lead to friction.

Determinants of Financial Inclusion Information Disclosure of Islamic Rural Banks in Indonesia

Determinants of Financial Inclusion Information Disclosure of Islamic Rural Banks in Indonesia

Pengaruh Dewan Komisaris Independen, Komite Audit, dan Kepemilikan Asing Terhadap Green banking Disclosure (Studi Pada Perbankan Di Indonesia Tahun 2017-2021)

The purpose of this study was to examine the impact of independent commissioners, audit committees, and foreign ownership on the green banking disclosures of Indonesian banks in 2017-2021. The population in this study is banking in Indonesia in 2017-2021 and the sample in this study is 35 banks. The sample in this study was obtained by using purposive sampling method. The method used to assess green banking practices is using content analysis that refers to green banking disclosure indicators. Causality relationship between independent board of commissioners, audit committee, and foreign ownership and disclosure of green banking was tested using multiple linear regression analysis method. This study found that there was a significant effect between the audit committee on green banking disclosure practices in Indonesian banks and did not find any influence between independent commissioners and foreign ownership on green banking disclosure practices.Keyword: Independent Commissioners, Audit Committees, Foreign Ownership, Green banking

Strong Financial Performance, Voluntary Disclosure of Relevant Data and Banks in Pakistan

Strong Financial Performance, Voluntary Disclosure of Relevant Data and Banks in Pakistan

Do effective audit committees, gender-diverse boards, and corruption controls influence the voluntary disclosures of Asian banks? The moderating role of directors’ experience

The study investigates whether effective audit committees, gender-diverse boards, and corruption controls affect the level of voluntary disclosures of Asian banks. Further, we analyze whether directors’ experience moderates the impact of audit committee independence, audit committee meetings, board gender diversity, and corruption controls on voluntary disclosures. We use data for commercial banks operating in six Asian countries, i.e., China, India, Pakistan, Malaysia, Hong Kong, and Singapore. For empirical analysis, we apply several robust statistical techniques. We find that commercial banks with effective audit committees, gender-diverse boards, and corruption controls tend to disclose less information voluntarily as they perceive limited benefits from optional disclosures. Further, we find unique evidence that directors’ experience significantly moderates the impact of audit committee independence, audit committee meetings, board gender diversity, and corruption controls on voluntary disclosures of Asian banks. Our unique findings are consistent with the proprietary cost theory. Further, our results indicate that commercial banks operating in countries that maintain rule of law, regulatory quality, and government effectiveness tend to disclose less information voluntarily.

PENGARUH PENERAPAN GREEN BANKING TERHADAP PROFITABILITAS PERBANKAN DI INDONESIA PERIODE 2016-2021

Climate change is one of the global issues that attract public concern these days. The banking sector is inseparable from the responsibility to protect the environment even though it does not directly contribute to environmental damage. Banks can apply environmentally friendly practices in their operational activities or also called green banking. This study aims to analyze the effect of implementing green banking on the profitability of commercial banks listed on the Indonesia Stock Exchange for the period 2016-2021. The application of green banking as an independent variable is projected by the Green Banking Disclosure Index (GBDI) and green banking products consisting of the number of ATM units and the frequency of M-banking transactions. Meanwhile, profitability as the dependent variable will be projected with Return on Assets (ROA). Panel data regression analysis was used to determine the effect of the independent variable on the dependent variable. The research findings reveal that partially the number of ATM units has a positive and significant effect on ROA, while GBDI and the frequency of M-banking transactions have a negative and insignificant effect on ROA. However, simultaneous testing found that the implementation of green banking projected by GBDI, Number of ATM Units, and Frequency of M-banking Transactions had a positive and significant effect on profitability.

PENGARUH UKURAN PERUSAHAAN LIKUIDITAS DAN PROFITABILITAS TERHADAP PENGUNGKAPAN ISLAMIC SOCIAL REPORTING DENGAN LEVERAGE SEBAGAI VARIABEL MODERASI

This study aims to determine whether firm size affects the disclosure of Islamic social reporting, whether liquidity affects the disclosure of Islamic social reporting, and whether profitability affects the disclosure of Islamic social reporting. Then the researcher adds leverage as a moderating variable in the study that can moderate firm size, liquidity and profitability on Islamic social reporting disclosure of Islamic commercial banks in Indonesia. By using disclosure theory which shows that CSR disclosure which is modified into ISR is related to future financial performance and has a good influence on the financial performance of the instution in the long term.

Analisis Hubungan Tingkat Kesehatan Bank Terhadap Pengungkapan Identitas Etika Bank Umum Syariah

This research aimed to determine the correlation of bank soundness levels toward the disclosure of Islamic commercial banks' ethical identity in Indonesia. This research data collection uses secondary data derived from annual reports available on the official website of each bank. To achieve the objectives, this research was conducted by examining 12 Islamic Commercial Banks in Indonesia that have been operating from 2014-2019. The sample of this study amounted to 72 samples with the determination of the sample using the purposive sampling method. Based on the test results using the correlation test. The researcher found that the level of bank soundness based on the Financing to Deposit Ratio (FDR), Good Performance Governance (GCG), and Capital Adequacy Ratio (CAR) had a correlation with the disclosure of the Islamic commercial banks’ ethical identity. However, there is no correlation between Non-performing Financing (NPF) and Return on Assets (ROA) with the disclosure of the Islamic commercial banks’ ethical identity.

Board Diversity and Corporate Social Responsibility Disclosure in ASEAN Banking Industry

Purpose : First, to find the determining factors which affects CSR disclosure in the ASEAN banking industry by examining the effect of diversity from gender, board size, and education. Second, observe and analyze the level and variation of ASEAN banking CSR disclosures.Method : This study uses a sample of the ASEAN banking industry with an observation period of 2017-2019. The bank annual report was examined to analyze the bank CSR disclosures using content analysis and panel data analysis.Findings : The inclusive results of this study reveal that there is a positive and significant effect of board education diversity on CSR disclosure of bank. Meanwhile, the diversity for board size and board gender is not significant for bank CSR disclosure. Based on statistical calculations, the level of CSR disclosure of banks varies from 13.09 percent to 27.89 percent, with on average they report each is Thailand 27.89 percent, Philippines 13.09 percent, Malaysia 17.04 percent, Singapore 14.49 percent, and Indonesia 25.17 percent.Novelty : First, this study contributes to the CSR literature, because the banking industry is generally avoided from CSR studies. Second, this study offers empirical evidence of board diversity on CSR disclosure. Third, adopts a cross-country approach across ASEAN rather than just one country. Fourth, present the results of the analysis under the CSR disclosure indicators GRI-G4 : financial service.
 Keywords : Corporate Social Responsibility Disclosure; Board Diversity; ASEAN; Banking Industry

The Correlation Analysis of Bank Soundness Levels toward The Disclosure of Islamic Commercial Banks' Ethical Identity

This study aims to determine the correlation of bank soundness levels toward the disclosure of Islamic commercial banks' ethical identity in Indonesia. This study data collection uses secondary data derived from annual reports available on the official website of each bank. To achieve the objectives, this study was conducted by examining 12 Islamic Commercial Banks in Indonesia that have been operating from 2014-2019. The sample of this study amounted to 72 samples with the determination of the sample using the purposive sampling method. Based on the test results using the correlation test. The researcher found that the level of bank soundness based on the Financing to Deposit Ratio (FDR), Good Performance Governance (GCG), and Capital Adequacy Ratio (CAR) had a correlation with the disclosure of the Islamic commercial banks’ ethical identity. However, there is no correlation between Non-performing Financing (NPF) and Return on Assets (ROA) with the disclosure of the Islamic commercial banks’ ethical identity.

Ownership concentration and its influence on transparency and disclosures of banks in India

PurposeThe disclosures in banks have become a matter of grave concern, especially post 2008 world financial crisis. The issue further gets exacerbated because disclosers in banks are part of the III pillar of BASEL-II floated in 1999, and despite that, banks face challenges in this regard. Ownership concentration (OC) is a point of discussion because it may affect banks’ corporate governance and transparency and disclosures (T&D) issues. This study aims to determine how OC affects the transparency in the banks.Design/methodology/approachA T&D index is built into the study covering all the relevant contemporary issues regarding disclosures in banks. The panel data specification is used to find out the association of components of the OC on the T&D practices in the banks. Bank data of 34 banks are gathered for four years for the study.FindingsIt is found that except for retail investors, other classes of OC are not concerned with the disclosures in the banks even though substantial financial and non-financial interests are at stake concerning them. The study’s findings suggest framing policies and regulations considering the accountability of promoters and institutional investors for ensuring disclosures in banks.Research limitations/implicationsA few proxies to measure T&D found in the literature have not been used in the study. Similarly, the definition of promoter’s class of investors can be improved.Originality/valueTo the best of the authors’ knowledge, no other study builds T&D for banks and examines their impact because of the ownership classes (as used by the current study). This study is unique in this aspect.

Voluntary Disclosure and Financial Performance of Listed Money Deposit Banks (DMB’S) in Nigeria

The study examined the relationship between financial performance and voluntary disclosure of listed deposit money banks in Nigeria. The study made use of an ex-facto research design. The population of the study was the 15 listed DMBs in Nigeria and its sample was 10 banks. It made use of secondary data, which was sourced from the audited annual reports of DMBs. The study made use of panel OLS regression, correlation analysis and descriptive statistics test. The findings show a positive and significant relationship between financial performance and the voluntary disclosure of deposit money banks in Nigeria. This study recommends DMBs not to underestimate the effect of financial performance on voluntary disclosure by ensuring that management work hard enough to faithfully increase their performance levels, as this would serve as a motivation to disclose for information to stakeholders.

Corporate Social Responsibility Disclosure by Islamic Banks in GCC Region

This paper aimed to assess the level of CSR disclosure of Islamic banks in the GCC region against a backdrop of Islamic finance principles and Islamic moral economy, using content analysis to create the CSR disclosure index. As well, it employs the qualitative research approach, which is followed by measurement and the interpretation of the qualitative conclusions. This paper used the content analysis approach to examine data from annual reports a total of twenty-eight Islamic banks, analysing 334 annual reports from 2006 to 2019. Furthermore, Bahrain Islamic banks took first place, while Saudi Islamic banks earned the lowest rate in the region. However, when compared to previous studies, the level of CSR disclosure shows a slight improvement. Despite this, the data reveals that CSR disclosure remains low, at 55%. Commitment to debtors placed best in a cross-sectional analysis of CSR disclosure dimensions, with an overall value of 0.69. For Zakat, charity, and beneficent loans, the minimum score is (0.36). Several reports from the tested Islamic banks were found to be lacking CSR disclosure information, according to these findings. This research adds to the body of knowledge and will be valuable to policymakers, government entities, and regulators who may want to encourage Islamic banks to issue and determine a basic index for CSR disclosure policies in their annual reports and websites. In addition, future research may examine survey methodologies that include more in-depth interviews with administration and important stakeholder, which could improve the CSR disclosure degree of understanding in Islamic banking.

Foreign strategic investors and bank credit risk in China: Disclosure, finance or management effects?

By using the two-way fixed effects model and Chinese bank data from 2003 to 2015, this paper studied the influence of foreign strategic investors (FSIs) on bank credit risk in China and tested the possible disclosure effect, management effect and financial effect. The research found that FSIs improved the information disclosure of local banks and enhanced the level of corporate governance. It is found that FSIs increased the NPL ratio of banks by 0.47% on average, mainly in the first 3 years due to the time lag, which is mainly attributed to the improved information disclosure of local banks. Based on the superposition effect, the study concluded that FSIs improved credit risk management and reduced the NPL ratio in the long term. In the mechanism test, loan growth and nonperforming loan write-offs had no effect on the coefficients of foreign shares, which excluded the possible financial effect; meanwhile, FSIs had no significant effect on yield either economically or statistically, which excluded the “high-yield, high-risk” market-based pricing mechanism. In the heterogeneity analysis, FSIs affected mainly the top five state-owned Chinese banks and joint-stock banks, while the impact of urban commercial banks was insignificant. The reason is probably that the top five state-owned banks and joint-stock banks are more important in Chinese banking industry and the government and regulators pay more attention to them. As a result, the reform is more standardized and thorough.

Communicated ethical identity disclosure (CEID) of Islamic banks under the AAOIFI and IFRS accounting regimes: a global evidence

PurposeThis paper aims to assess the ethical disclosure of Islamic banks (IBs) under different accounting regimes and to ascertain whether the adoption of an Islamic accounting standards (Auditing Organization for Islamic Financial Institutions [AAOIFI]) promotes the practice of ethical disclosure.Design/methodology/approachAn ethical identity disclosure index was developed to serve as a benchmark to assess the level of the communicated ethical identity disclosure (CEID) of 47 IBs over 18 countries using annual reports.FindingsThe findings suggest that, overall, there is poor ethical disclosure practices and even banks that had some initiatives towards disclosures had no proper reference to benchmark for effective implementation of ethical reporting standards and had no plans for ethical and socially responsible schemes. There was no evidence to suggest that IBs that adapted the religious-based accounting regime (AAOIFI) had better levels of ethical disclosure.Research limitations/implicationsThough poor practices of CEID are expected to increase reputational risks and the likelihood of loss of religious conscious customers and investors’ confidence and therefore market share and performance in the long-term, the current practice does not concur with this expectation. Furthermore, since there is no evidence to support the notion that the adoption of AAOIFI standards would support greater initiatives towards level of ethical identity disclosures, a mandatory requirement for effective disclosure through enforcement of AAOIFI’s financial reporting standards, specifically with regard to ethics and social and environmental commitment is needed.Practical implicationsIn addition to introducing commonly accepted regulatory and supervisory guidelines and best practices that cater for the specificities of Islamic banking could significantly improve the level of CEID of IBs. In addition, the standardization of ethical (non-financial) reporting practices of IBs through guidelines and key performance indicators will facilitate CEID practices of IBs.Originality/valueThis paper contends that for Islamic bankers, ethics is an entrenched part of the business practice and should mitigate unethical behaviour, more so with the additional filter of Sharīʿah supervisory boards. Even if there are such practices due to ineffectiveness of Sharīʿah committees, management pressure to meet performance expectations and competitive pressures from peers in the conventional banking sector, it will not be in the interest of the banks to report them.

Faktor-Faktor Dalam Meningkatkan Pengungkapan Green Banking

The purpose of this study was to examine and analyze the influence of Operational Cost of Operating Income (BOPO), Capital Adequacy Ratio (CAR), Financial Slack, Human Resource Slack, Sustainability Officer, and Sustainability Committee on green banking disclosure and also to analyze the differences between green banking disclosure before and after the issuance of POJK Number 51 / POJK.03 / 2017 concerning sustainable finance of 12 sample companies of bank sub-sectors listed on the IDX during the 2016-2019 period. The analysis used in this study was multiple linear regression analysis to examine the causality relationship between independent variables on green banking disclosures, as well as the Wilcoxon test to determine differences in the level of disclosure before and after POJK Number 51/POJK.03/2017 issuance. The results of this study indicate that there are differences in green banking disclosures before and after the issuance of POJK Number 51 / POJK.03 / 2017. In addition, it was also found a positive significant effect of the sustainability committee on green banking disclosure while Operational Costs on Operating Income (BOPO), Capital Adequacy Ratio, Financial Slack, Human Resource Slack, and Sustainability Officer have no significant effect.

KINERJA KEUANGAN DAN PENGUNGKAPAN CORPORATE RESPONSIBILITY PERBANKAN SYARIAH DI INDONESIA

Performance has an effect on CSR disclosure of Islamic Commercial Banks in Indonesia. The financial performance variable uses the profitability ratios (ROA, ROE, NIM), while the CSR measurement uses the ISR indicator. The sample in this study uses 6 Islamic Commercial Banks with a data period from 2014-2016. Data analysis in this study used multiple linear regression. The results of this study are Return on Assets (ROA) has a significant positive effect on CSR disclosure, Return on Equity (ROE) has a significant positive effect on CSR disclosure, and Net Income Margin (NIM) has an insignificant positive effect on CSR disclosure. Together, the ROA, ROE, and NIM variables have a significant effect on the disclosure of Islamic Bank CSR in Indonesia in 2014-2019.

Impact of Financial Performance on Green Banking Disclosure: Evidence from the Listed Banking Companies in Bangladesh

This paper examines the impact of green banking disclosures on the quality of financial performance over thirty listed banks of the Dhaka Stock Exchange. Time-series data through the year 2014 to 2017 have been scrutinized, out of which we have selected 70 effective samples because of the availability of the green banking disclosures. Multivariate analysis has been conducted where the spending on green banking is used as a dependent variable, the proxy variables of green banking disclosures. As the independent variable of financial performance, we have used three dimensions: profitability, liquidity, and solvency. The ROA, LR, and DAR have been used as proxy variables simultaneously. We found that green banking disclosures and ROA have a considerable positive relationship. In contrast, the other two financial performance variables, LR and DAR, have no statistically significant relationship with green banking spending. The study's findings will encourage the highly profitable listed banks to invest more in greening their activities, ultimately leading to sustainable development in this sector.

Management obfuscation through mandatory financial risk disclosure: evidence from European-listed banks

Purpose This study aims to investigate the readability of financial risk disclosure divulged by listed banks of the first five European countries according to gross domestic product. Design/methodology/approach This study adopts the management obfuscation hypotheses and tests data gathered for a sample of 790 observations from listed banks in Europe covering the 2007–2018 period. This study uses a readability index (Gunning’s fog index) as the dependent variable for measuring the readability of banks’ mandatory financial risk disclosures. Moreover, it relies on a completeness index, discretionary accruals and several control variables for identifying the determinants of risk disclosure readability using ordinary least square regression for testing the hypotheses. Findings The findings show the existence of a positive relation\nship between readability and completeness of risk disclosure. In contrast, a negative relationship exists between readability and banks’ discretionary accruals. Originality/value This study expands the stream of accounting literature analyzing the lexical characteristics of narrative risk disclosure, and, by focusing on the financial risk disclosure of banks, it extends the readability-related debate, which has primarily concentrated on other types of disclosure to date. This study is relevant to regulators and policymakers for fostering reflections as actions for improving the financial risk disclosures readability. This study is also of potential interest for investors to better delve into the questions surrounding risk disclosure.

Banking disclosure and banking crises in Africa: does board gender diversity play a role?

The paper aims to investigate the impact of board gender diversity in explaining the relationship between bank disclosure and the predicted probability of banking crises in Africa. The study employs robust panel estimates based on an aggregate dataset of banks in 42 African countries over the 2006–2018 periods. From the study, board gender diversity (more women on boards and the presence of women on boards) has a positive impact on information disclosure of banks. We find that board gender diversity and bank disclosure have the possibility of reducing a banking crisis. We observe that board gender diversity enhances the reductive effect of bank disclosure on a predicted probability of a banking crisis. The implication is that women on boards provide prudent decisions on financial information disclosure that significantly reduce the possibility of a banking crises in order to ensure stable banking systems.