Risk Information Disclosure of Vietnam Listed Banks
- DOI
- 10.2991/aebmr.k.211119.014How to use a DOI?
- Keywords
- CAR; credit risk; Basel II; information disclosure; commercial bank
- Abstract
Research purpose:
Basel Committee (2004) sets the Basel 2 with three pillars as Pillar 1 (Capital Adequacy Requirements) and Pillar 2 (Supervisory review) in order to improve bank efficiency. More specifically, the Pillar 1 with information disclosure requirement to support bank-related parties in financial market in assessing important information related to applying regulations of minimum capital adequacy ratio calculation involves risks, risk assessment process and banks’ level of capital adequacy. The application of Basel II requires complicated data and analytical models, which might be challenging for banks in Vietnam where there are no consensus and common standards on operations as well as on statistical data. To improve banks’ transparency and integration to the international standard, the Circular 41 has been issued to stipulate the minimum disclosure of information to be made by banks and foreign bank branches in Vietnam. This paper studies current risk information disclosure of Vietnam listed banks right under the stipulation of the Circular 41/TT-NHNN.
Research motivation:
The research has been done not only to evaluate the current risk disclosure of Vietnam banks but also to provide the foundations for proposing policy recommendations regarding the risk information disclosure of commercial banks in Vietnam.
Research design, approach and method:
Circular 41 stipulates the content of information published by banks and foreign bank branches in Vietnam. The current risk disclosure of Vietnam listed banks is evaluated basing on scoring method. Except for the information of the bank’s name, which gets 1 point; for all other information item, the score is 2 for fully disclosing according to regulations, the score is 1 if non-detail disclosing and 0 for non-disclosing. The number of studied banks is 15 out of 19 listed banks in Vietnam Stock Exchange.
Main findings:
The study results indicate that the disclosure compliance of listed banks is good when the Circular 41 is implemented. The detailed information disclosure group (over 45 points) includes 9 banks, the medium disclosure group (18-22 points) includes 4 banks, and the last group includes 2 banks with no information. The average disclosure banks tend to have less detail on market risk and operational risk than the detailed information disclosure group
Practical/managerial implications:
The banks should put disclosure information that meets Circular 41 in a separate section on the website to make it easier for investors to find and access. In addition, Circular 41 and Circular 13/2018/TT-NHNN have given full guidelines for commercial banks to apply Basel II and this is still a challenge for many banks while the Basel Committee introduced the Basel III version. Some domestic banks have also taken steps to prepare for the application of this Basel III standard. Thus, in order to support banks in Vietnam to continue implementing Basel III, the State Bank of Vietnam needs to provide guidance and support for commercial banks to implement this activity.
- Copyright
- © 2021 The Authors. Published by Atlantis Press International B.V.
- Open Access
- This is an open access article under the CC BY-NC license.
Cite this article
TY - CONF AU - Ngo Thu GIANG AU - Dang Anh TUAN PY - 2021 DA - 2021/12/07 TI - Risk Information Disclosure of Vietnam Listed Banks BT - Proceedings of the International Conference on Emerging Challenges: Business Transformation and Circular Economy (ICECH 2021) PB - Atlantis Press SP - 122 EP - 131 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.211119.014 DO - 10.2991/aebmr.k.211119.014 ID - GIANG2021 ER -