WASHINGTON -- Banks could boost their stock prices by giving investors more information, according to a study released Wednesday by PricewaterhouseCoopers. Return on risk-adjusted capital, economic profit, market growth, and customer retention are key areas in which investors want more data, according to the report.
PricewaterhouseCoopers hired Market and Opinion Research International to survey executives at 39 banks in the United States, Europe, Canada, and Australia; 51 institutional investors in financial services stocks; and 39 sell-side bank analysts.
The research firm found large gaps between what bankers believe they are providing the market and what investors and analysts think they are getting. "Bank executives overestimate how well they meet investors' and analysts' needs for information," the report said.
Bank chief financial officers gave the researchers plenty of reasons why more data are not made public, including not wanting to tip off rivals. But the report dismissed such concern as shortsighted. "Banks must seriously reconsider whether the benefits of not reporting this information are worth the costs of not doing so," it said.
In speeches this fall, many federal regulators have endorsed further disclosure by banks as a way to strengthen market discipline.