An Analysis of the Practice of Earnings Conference Calls: Evidence from Deposit Money Banks in Nigeria

Abstract

In the digital age, especially the advent of the Internet, companies now have complimentary media or outright substitute media for passing information to stakeholders, thus giving stakeholders better access to information and providing equity of access to information. Annual reports and other financial reports are now posted on companies’ websites and are freely accessible. Spoken communications, hitherto made during live meetings, are now commonly done through earnings calls. The study sample consists of 25 deposit money banks in Nigeria. The banks’ websites were visited to access conference calls records from the First Quarter of 2008 to the year-end of 2019. A dichotomous non-weighted scoring method was used to assess the availability of earnings conference calls, while a weighted scoring method was adopted for the types of earnings calls disclosed. The study found that most quoted deposit money banks have adopted earnings conference calls to interact with analysts and investors, while unquoted deposit money banks are left behind. The study also found that while conference calls are made either as audio-only or video, most banks only post the transcripts of such interaction. The study recommends that banks that have not adopted earnings conference calls should adopt this medium to convince stakeholders that the banks are not hiding anything bad. Furthermore, the original form of the conference calls should be made available on the banks’ websites in addition to transcripts.