HIGHER financial disclosure is no doubt commendable, but a lack of accompanying commentary to explain figures defeats the whole purpose of greater transparency. While Bank of East Asia (BEA) chief executive David Li Kwok-po led the call for greater financial disclosure, the number of financial items revealed in his company's preliminary report yesterday was barely enough to satisfy the Hong Kong Monetary Authority (HKMA), the territory's de facto central bank. Compared with the preliminary reports of competitors, BEA fell short in many aspects. In presenting its net interest income, the average interest earning assets were not given, making it difficult to calculate the net interest margin. Regarding other operating income, no breakdown was presented in relation to dividend income, fees and commissions payment and receivable and dealing profits. Although the figure on other operating income showed a decline, analysts were left pondering why. There was no breakdown of operating expenses. A spokesman from the HKMA argued that as it was only a preliminary result announcement, more details would be given in the annual report. One analyst countered: 'The format is clearly an improvement on the previous one. But in terms of commentary, it's appalling. It does not tell you anything.' The most obvious point was the sharp increase in shareholders' funds and the decline in customer deposits. In both cases, no comparative figures were listed and no explanation was provided. Even the extra general provision of $42 million was not explained clearly. 'Uncertain global economic outlook' was the response. Concerning the exceptional item, analysts could not agree on whether the bank had booked all its profit from the sale of residential units in Kennedy Town. 'A number of the units in the residential tower were sold, and buyers commenced to take possession in December 1994,' the report stated vaguely. While bank-specific commentary is hard to find in the document, general descriptions on the overall banking sector abound. That is followed by a recapitulation of the major published events during the year. Compared to the item-by-item description of the increases or decreases by Hongkong Bank and Hang Seng Bank, BEA has ample room for improvement. Commentary on any result should endeavour to clarify figures and enlighten readers. It should be specific and address the issues that are of interest to shareholders so that they can make informed decisions. Vague statements and lack of commentary on important figures can create rumours that higher transparency is designed to dispel.