Book description
This book presents the main valuation approaches that can be used to value financial institutions. By sketching 1) the different business models of banks (both commercial and investment banks) and insurance companies (life, property and casualty and reinsurance); 2) the structure and peculiarities of financial institutions' reporting and financial statements; and 3) the main features of regulatory capital frameworks for banking and insurance (ie Basel III, Solvency II), the book addresses why such elements make the valuation of financial institutions different from the valuation of non-financial companies.
The book then features the valuation models that can be used to determine the value of banks and insurance companies including the Discounted Cash Flow, Dividend Discount Model, and Residual Income Model (with the appropriate estimation techniques for the cost of capital and cash flow in financial industries). The main techniques to perform the relative valuation of financial institutions are then presented: along the traditional multiples (P/E, P/BV, P/TBV, P/NAV), the multiples based on industry-specific value drivers are discussed (for example, P/Pre Provision Profit, P/Deposits, P/Premiums, P/Number of branches). Further valuation tools such as the "Value Maps" or the "Warranted Equity Method" will be explained and discussed. The closing section of the book will briefly focus on the valuation of specific financial companies/vehicles such as closed-end funds, private equity funds, leasing companies, etc.
Table of contents
- Cover
- Title Page
- Copyright
- Preface
- Acknowledgments
- Chapter 1: Bank Business Models
- Chapter 2: Financial Statements Analysis for Banks
- Chapter 3: The Regulatory Capital for Banks
- Chapter 4: Assessing and Preparing the Business Plan for a Bank
- Chapter 5: Bank Valuation
- Chapter 6: Insurance Business Models and Financial Statements
- Chapter 7: Regulatory Capital for Insurance Companies
- Chapter 8: Assessing the Business Plan for an Insurance Company
- Chapter 9: Insurance Companies Valuation
- Chapter 10: The Valuation of Other Financial Companies
- References
- Index
Product information
- Title: The Valuation of Financial Companies: Tools and Techniques to Measure the Value of Banks, Insurance Companies and Other Financial Institutions
- Author(s):
- Release date: March 2014
- Publisher(s): Wiley
- ISBN: 9781118617335
You might also like
book
Bank Valuation and Value Based Management: Deposit and Loan Pricing, Performance Evaluation, and Risk, 2nd Edition, 2nd Edition
The professional resource every investment banker must have—the definitive guide to complying with the brand-new Basel …
book
Valuation Techniques: Discounted Cash Flow, Earnings Quality, Measures of Value Added, and Real Options
Analysis and insights from top thought leaders on a pivotal topic in investing and asset management …
book
Value and Capital Management: A Handbook for the Finance and Risk Functions of Financial Institutions
A value management framework designed specifically for banking and insurance The Value Management Handbook is a …
book
Strategies of Banks and Other Financial Institutions
How and why do strategic perspectives of financial institutions differ by class and region? Strategies of …