An international analysis of banks’ disclosure policiesdividends and provisions

Resumen

The motivation of this dissertation relies, firstly, on the interest of analysing the development of banks in recent times, after overcoming the financial crisis of 2007-08, considering the several difficulties that they need to face, and the relevance of the financial system for the whole economy of a country. Secondly, nowadays interest and importance of disclosure policies provides an interesting insight for the study of classic financial topics, such as agency problems, risk-taking policies and managerial behaviour. The combination of these two circumstances provides a remarkable framework for contributing to the literature and giving advice to policy-makers and practitioners. Specifically, the study of dividends policies and provisions can shed light from a new point of view. We analyse the role of scrip dividends using a sample of 79 banks from 20 European countries between 2014 and 2018. We find that scrip dividends have dramatically modified the payout policy of European banks. Whereas banks do not seem to smooth cash dividends, we find clear evidence that they do smooth total dividends, which includes both cash and scrip dividends. We also find that the new legal requirements (resulting from the Basel Accords and other country-level laws) have different implications on cash and scrip dividends, suggesting a positive relationship between the legal requirements on capital adequacy and scrip dividends. We study the legal provisions of 92 European systemic banks from 18 countries over the years 2008-2017, offering a pioneering study of the quantitative analysis of legal provisions. We show a positive influence of influence of corporate governance and institutional environment in the disclosure of banks' risk through legal provisions. Similarly, we address banks’ loan loss provisions with a worldwide empirical study of 1,351 banks from 52 countries over the period 2000-2019. We find that the recognition of risk by the banks through loan loss provisions does indeed depend on its board size and independence, the tenure of the board and the presence of female directors