Author(s): Nathaporn Gunnarapong, Supa Tongkong, Wachira Boonyanet
This study investigated the influences of the CAMEL international rating system for financial institutions and banking fundamentals on voluntary disclosures. A voluntary disclosure index was newly developed using bank information provided in annual reports and other sources that were publicly available in the 2016-2019 time period. The voluntary disclosures were finalized into three layers: total voluntary disclosures, extra voluntary disclosures, and non-extra voluntary disclosures. The dataset comprised 20 banks in Thailand. The evaluation of the data employed content analysis (RapidMiner), descriptive statistics, and multiple regressions. The descriptive results showed that banks in Thailand voluntarily disclosed extra information rather than limit disclosures merely to compliance with legal and regulatory requirements, especially the extra voluntary disclosures. The statistical analysis found that at the .05 significance level, the total voluntary disclosures positively related to the percentage of common shares held by the Thai Government, return on equity and loan to total deposits, but negatively related to percentage of common shares held by foreigners, listed banks, capital adequacy ratio and non-performing loans. The multiple regressions resulted in very similar findings with regard to the non-extra voluntary disclosures, except that there was no significant relationship identified with non-performing loans. In addition, the extra voluntary disclosures negatively related only to listed banks; however, the high adjusted R2 was signposted. This study successfully contributes to the field of study by demonstrating that bank managers need to put more effort to the voluntary disclosures because they reflect their fundamentals (i.e. CAMEL). In addition, in order to reduce concerns about asymmetric information, regulatory authorities should encourage banks to focus on voluntary disclosures and rewarded them if voluntary disclosures are made.