Existing literature focuses on the evaluation of the readability of annual reports of non-banking companies. However, banking companies’ opaque nature and a double motivation to abuse accounting discretion requires a separate study on the readability of banks’ annual reports in association with their performance. We, therefore, attempt to explore firm performance and readability of banking firms’ annual reports in India. Net interest margin (NIM) and Fog Index are used as performance and readability variables respectively. We find that management discussion and analysis (MD&A) of the Indian banks is difficult to read. However, when we compare it with existing literature, Indian banks’ MD&A is difficult but not unreadable. Panel data regression analysis shows that firm performance would have a negative impact on the Fog Index. Further analysis of good and weak performing banking firms shows that the effect of NIM on Fog Index is higher in the case of weak performing banks. Empirical results affirm that firms with weak performance would structure their annual reports to veil adverse information in unfavourable situations. Consistent with the opaque nature of banks and incomplete revelation, managers of banks make MD&A harder to read to cover up the causes of weak performance. Application of readability index in case of banking companies in an emerging economy in association with performance is the contribution of this paper. An assessment of the readability of annual reports is an interesting topic for research to better understand the recent negative developments in Indian banking industry such as high non-performing assets, continuously declining return on assets, sharp increase in banking frauds and poor governance.

现有文献集中在评估非银行公司年度报告的可读性。但是，银行公司的不透明性质和滥用会计自由裁量权的双重动机要求对银行年度报告的可读性及其绩效进行单独研究。因此，我们尝试探索印度的银行绩效和银行公司年度报告的可读性。净利差（NIM）和起雾指数分别用作性能和可读性变量。我们发现印度银行的管理层讨论和分析（MD＆A）难以阅读。但是，当我们将其与现有文献进行比较时，印度银行的MD＆A很难但并非难以理解。面板数据回归分析表明，公司绩效将对雾指数产生负面影响。对表现良好和表现欠佳的银行公司的进一步分析表明，对于表现较差的银行而言，NIM对雾指数的影响更大。实证结果表明，业绩不佳的公司将构建年度报告，以掩盖不利情况下的不利信息。与银行的不透明性质和不完全的披露相一致，银行的经理们使MD＆A难以理解以掩盖业绩不佳的原因。本文的贡献在于，在新兴经济体的银行公司中，将可读性指数与绩效联系起来。对年度报告的可读性进行评估是一个有趣的研究话题，以便更好地了解印度银行业的近期负面发展，例如不良资产较高，资产收益率持续下降，