Price to book multiple is a prefered valuation metric for banks. This is because a bank needs to keep on raising fresh capital for future growth. There is a dilution effect from this. Hence one cannot project a banks earnings to perpetuity (and therfore not give a PE multiple).
Apart from PBV also look at RoE for banks.
~Hopethishelps
~Rajat
Edited 1 time(s). Last edit at Monday, September 7, 2009 at 07:25AM by PropTrader.
Most assets and liabilities of banks are constantly valued at MARKET VALUES....so they can be easily valued....so the banks book value is very close to its actual value....
发表于 2011-7-13 16:01
| 
