Monetary Board enhances rules on annual reports for banks, non-banks

The Bangko Sentral ng Pilipinas' (BSP) policy-setting Monetary Board has approved the amended guidelines on the presentation of annual reports of banks and quasi-banks.

In a statement on Wednesday, the BSP said the move is aimed at enhancing market discipline aligned with international best practices.

"Under the revised rules, banks and quasi-banks are required to disclose in their annual reports significant information concerning their financial condition, performance, ownership, and governance," the central bank noted.

It added that the revised guidelines will enable the public and market participants to better understand the true condition of the banks and quasi-banks.

“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," BSP Officer-in-Charge Nestor Espenilla Jr. said.

The BSP said all banks and quasi-banks, except foreign banks, 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," it noted.

The annual report includes discussion and analysis of the bank's or quasi-bank's corporate policy, financial highlights, financial condition, and results of operation.

It also provides information on the bank and quasi-bank's risk management and corporate governance framework.

"Banks and quasi-banks with complex business segments will be required to disclose more granular information," the central bank said.

The BSP noted that the approval of the Monetary Board will apply to annual reports for the financial year 2017, giving banks and quasi-banks adequate transition to the new requirement. — BM, GMA News