All banks now required to publish annual reports
ALL PHILIPPINE BANKS are now required to publish annual reports and disclose more information to the public, as the Bangko Sentral ng Pilipinas (BSP) seeks to instill greater “market discipline” among lenders.
In a statement released yesterday, the BSP said all banks and quasi-banks (QBs) must release their annual reports starting the 2017 fiscal year, where they must also disclose “significant information” covering the company’s financial condition, performance, ownership, and governance.
The rules do not cover foreign bank branches in the country.
The enhanced disclosure standards will allow the public and market participants “to better understand the true condition of the bank and QB,” the BSP statement read. BSP Deputy Governor Nestor A. Espenilla, Jr. also cited the need for greater transparency, saying that access to “material information” is vital to investor decisions.
The BSP regulates all banks and other financial institutions in the country. The fresh set of rules are seen to improve financial consumer protection, while also aligning with international standards.
Prior to the new rule, only universal, commercial, and thrift banks with at least P1 billion in resources are required to prepare a yearly report to be submitted to the BSP, as provided under the Manual of Regulations for Banks.
The reports must include a bank or quasi-bank’s corporate policy, financial highlights, audited financial statements, as well as its standing risk management and corporate governance frameworks. Among the specific details sought from lenders are discussions about the banks’ risk appetite and strategy, anti-money laundering protocol, retirement and succession policy, among others.
“Banks and QBs with complex business segments will be required to disclose more granular information,” the BSP said.
The annual reports will be due 180 calendar days after the close of the fiscal year. The BSP said it will impose “stiffer” sanctions should a bank fail to disclose material information in their submissions as a “serious offense.” Late reports will also be penalized. -- Melissa Luz T. Lopez