Europe bank reports remain tough to interpret - KPMG

LONDON (Reuters) - Annual reports from Europe's top banks continue to grow in length and complexity and it remains tough to interpret risk disclosures and compare lenders, according to a report published on Tuesday.

Liquidity, market and credit risk disclosures are difficult to interpret and the financial statements still lack comparability, audit and professional services group KPMG said in a report.

It said there was a wide variety in how banks used fair value estimates of financial assets and financial liabilities.

KPMG's review of the published accounts for 16 European bank showed the average length of annual reports had increased 3 percent to 317 pages and the core sections on financial statements, accounting policies and notes had risen by a fifth.

"Although this is very commendable, as it provides more information on the individual bank, the study shows that it is still very difficult for financial statement users to assess the relative position of banks," said Bill Michael, partner in charge of UK financial services assurance at KPMG.

This was mainly due to accounting options offered by IFRS (International Financial Reporting Standards), their complexity and the challenge in applying generalized accounting standards to the banking industry.

(Editing by Jon Loades-Carter)