Question for FIG Bankers

I'm pretty sure book value multiples are important for financial institutions (especially bank holding companies) so I would include those, but that isn't to say they are the most important metric for comping investment banks. Sorry that's all I got.

Second changing the title of the thread.

Did my stint at a BB FIG Group during the summer. FIG bankers never look at EV/EBITDA or multiples commonly used for manufacturing companies. PB is more relevant. They never even take a look at the cash flow statement because the cash inflows and outflows of a bank are not remotely related to its earnings.

Common operating ratios include ROE and ROA, for banks.

For insurance companies, look at P/EV, or price to EMBEDDED value, not enterprise value. When doing an insurance deal, banks typically hire a actuarial firm to do the EV part of the valuation.

FIG valuations overall are very specialized so don't expect to get any training from annual training sessions.

this is actually a very interesting question because the answer would largely depend on what kind of investment banks you are looking at since depository institutions and pure-play investment banks are extremely different from a valuation perspective.

if you are looking at all-in-one type investment banks like BAML, Citi, JPM, etc., then I would say use a traditional bank valuation multiple such as PBV since most of these companies' businesses are in commercial deposits. however, if by "investment bank" you are referring to pure-plays such as LAZ, EVR, GHL, then using a traditional EV/Sales or EV/EBITDA multiple would actually make more sense (extremely similar to how asset mgmt bankers use EBITDA ratios).

so the short answer is, it depends on the composition of your comp set.

Thanks guys I appreciate the feedback.