Many of Europe’s biggest banks have shown a marked swing in the value of their reported equity in their 2005 accounts as a direct result of the introduction of International Financial Reporting Standards (IFRS), according to a study published by Ernst & Young.
The 24 major European banks analysed in the study show a wide range of outcomes in adopting the new rules. While Groupe Banques Populaire recorded a gain in the value of the equity on its balance sheet of 22% with the adoption of IFRS, under the same rules Barclays reported equity value effectively declined by 12%.
Tony Clifford, partner and IFRS banking specialist at Ernst & Young, said that the introduction of IFRS in 2005 had the single biggest impact in a generation on the balance sheets of Europe’s major banks. He said he believed that the complexity of the standards and the consequent volatility in reporting had led to a great deal of frustration among the banks, regulators, analysts and investment community
“Our analysis suggests that the European banks’ accounts should be handled with care. Although all 24 banks have been reporting under the same standards, the number of options available, differences in interpretation where standards are not clear and the involvement by national regulators means that the presented numbers vary considerably,” he said.
AITE GROUP REPORT:
ONLINE BILL PAYMENTS: CHASING THE NEXT BIG THING
In the next few years, online bill payment processors that support US banks’ web-based bill payment services will grow their transaction volume by 19% per year, according to a report from Boston-based Aite Group, which provides an overview of the payment, channel and revenue trends in consumer bill payment processing. As new opportunities emerge, author Gwenn Bezard suggested, banks should embrace alternative channels such as e-mail and mobile phones.
The report examines the way payments in the US will change and includes the following points:
- Security scares have not affected consumers’ embrace of electronic bill payment and are not expected to do so in the coming years.
- There is still considerable room for growth for the consolidator model fostered by banks.
- Cards are rising as a major force in consumer bill payments.
