Financial Disclosure and Reporting in Malaysian Commercial Banks

Financial reporting and disclosure are important means for management to communicate firm performance and governance to outside investors. Public disclosure merits special attention in the Asian region because firms in these countries are less inclined to be transparent compared with their UK/US counterparts (Ball et al 1999). This paper reports the findings of a project that examined corporate reporting and information disclosure among Malaysian commercial banks. Disclosure items used by the Basel Committee on Banking Supervision in its 2001 survey were applied as a benchmark against Malaysian banks. The 2001 annual reports of a total of nineteen Malaysian banks were examined, and their disclosure rate was then compared to that of the Basel survey. The results show that although Malaysian domestic banks have undergone considerable industry shakeout and consolidation, they are still somewhat unsophisticated and disclosed far less compared with banks in the Basel sample. However, Malaysian banks have met some of the international standards of bank reporting.