Assessing Bank Quality: can simple methods be applied to a pile of complex data?

Held on Wednesday, November 30.


  • Bruce Packard

  • George Graham

  • Simon Samuels

  • Bridget Gandy

  • Justin Bisseker



The heavy tomes that banks produce as their annual reports have many critics, from the postmen who deliver them to corporate governance experts, who should know better. They actually contain a wealth of useful information on everything from strategy and risk management to executive pay and balance sheet strengths and weaknesses. Nevertheless, add in Pillar 3 disclosures under the Basel rules and the results of stress tests carried out by supervisors, and the data to be mined on banks can sometimes seem overwhelming.

Lafferty Group, a provider of research and training in retail banking, has developed a set of bank quality ratings using the material in annual reports. Its way of rising above the sea of data is to use relatively simple financial metrics, and to look for evidence of decent management and culture in the non-financial information. But every analyst and investor in the sector has her or his own views on how to mine the data and assess quality – and it is a sector badly in need of some attention (if not love) from investors.

To open our discussion of the issues, we are pleased to welcome Bruce Packard, CFA, senior analyst at the Lafferty Group, and lead designer of the ratings. Bruce is a long-standing banking analyst with experience at Credit Suisse, ING and Societe Generale. This year, he also joined Capital Access Group, the investor engagement adviser.

But he will not get things all his own way. I am grateful that he will be joined by three other experts on banking, with both financial analytical and strategic perspectives:

  • Simon Samuels, a former head of European banks equity research at both Barclays and Citigroup, and now an independent adviser and regular commentator on the sector. He is a member of the Financial Stability Board Task Force examining bank financial reporting.
  • George Graham, until recently head of strategic insight at RBS. He remains a pension fund trustee and chair of the Common Investment Fund. George is a former head of the FT’s Lex column and a former banking editor.
  • Bridget Gandy, co-head of EMEA Financial Institutions at Fitch Ratings.  Between 2005 and 2009, Bridget was a managing director in Fitch Ratings’ Credit Policy Group, responsible for accounting and corporate governance research.
  • Justin Bisseker, CFA, senior research analyst at Schroders where he has covered the Pan-European Banking Sector since 1997. Justin previously worked at Price Waterhouse.