Insights

A reporting comparison for the informed investor in South Africa

Evolving 2011 - 2015

In this report, we analysed and compared certain aspects of financial reporting information for five banks listed on the JSE in South Africa. The focus of the report is on consistency and comparability of risk reporting among financial institutions operating in a regulated and ever complex post-financial crisis era

Key takeouts from this report

In the short-term, some financial institutions should approach BCBS 239 and Pillar 3 reporting by identifying the core requirements needed to achieve minimum adherence; adapt current systems to achieve compliance; and use a balanced approach to obtain an efficient trade-off between cost and resource allocation.

In the long-term, these institutions should identify skills shortages to improve data aggregation; invest in IT systems which currently are not adequately set up for the future state of risk reporting; review and implement BCBS 239 regulations in conjunction with Pillar 3 reporting; and reduce duplicating the extraction of data and data calculations which is a regulatory and reporting requirement.

What our experts say

In this report we observed that banks tend to segment their impairments in different ways and the revised disclosures being introduced by the South African Reserve Bank will create comparability going forward.

Banks will need to ensure they are capable of calculating both Advanced Internal Ratings-Based approach numbers and standardised approach numbers to the granularity required in the revised Pillar 3 disclosures.

Banks will also need to ensure their collateral data is robust and accurate enough to meet the revised Pillar 3 requirements, which means being able to identify segregated versus unsegregated data.

Mark Arnold – Director: Strategy and Innovation Financial Services
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