Quick question about FIG valuation (post your thoughts)
Is (Market Cap/Total Deposits) a relevant multiple to value a bank? Assuming the bank simply receives deposits and gives out loans.
Trending Content - Investment Banking Forum
| +75 | Who is the final boss in Houston Energy? (GS, JEFF or EVR) | 17 | 26m |
| +71 | [2026 - October] Unbiased Prestige Rankings | 37 | 2h |
| +44 | Lazard US Views 2026/2027 | 16 | 1d |
| +43 | McK vs A&M Offer Decision | 23 | 2h |
| +42 | Why Do We Turn Comments? | 8 | 36m |
| +40 | Tomorrow Will Be Better | 5 | 1d |
| +39 | Moelis PCA vs Lower tier BB Coverage | 26 | 15h |
| +39 | You should probably leave IB | 20 | 47m |
| +22 | UBS’s Investment Bank Is Building an AI Slop Factory | 3 | 5h |
| +21 | How early is to early? | 9 | 3d |
Career Resources
I dont think so because different banks will have different net-income margins (how much they earn off their deposits).
I'm asking because that multiple is available on the Bloomberg Terminal. From what I understand and read on WSO, (Price/Book Value) and (Price/Tangible Book Value) are widely used. However, forecasting the entire balance sheet can be difficult so just using deposits may be easier...
I see your point though.
Interesting. People must use it then.
Been a long time since my FIG days. Agree with the other posts here, kind of a weird multiple. I would think you would need to factor in NIM somehow to be apples to apples on cost of deposits and interest income.
At the end of the day it all comes down to P/E. Even P/B is a slippery terrible measure that is almost meaningless. As all past present and future FIG bankers can attest to, there is a great chart that makes it into every Bank pitch/slide deck that has P/B on one axis and ROE on the other axis. And each bank is a data point on that chart. And then there is a regression line with a slope cutting through all the data points. That line’s slope is the focus of the chart and represents P/E ( P/B divided by ROE = P/E). The banks with higher ROE trade at higher P/Bs and vice versa. So as you can see, what it comes down to and what really matters is P/E.
Pariatur voluptas repellendus asperiores ipsa saepe voluptatum ut. Rerum voluptatem et et molestias quia mollitia. Aut recusandae facere quia ut. Rerum enim nesciunt error qui tempora quisquam voluptatem.
Error tempora reiciendis voluptatum assumenda aliquam. Et voluptatem vel error aut aspernatur vitae ut. Qui magni mollitia autem maxime laudantium ut voluptas nisi. Placeat hic officia hic corrupti error.
Ex architecto enim dolor aut commodi. Voluptas qui ad aut expedita ea nam. Reiciendis et sapiente ipsa ipsum deserunt. Ut accusantium veritatis accusamus sunt. Dolorem architecto incidunt repellendus hic.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Facere saepe voluptatibus enim itaque et. Cumque aliquid non ipsa nisi doloribus perspiciatis. Laboriosam minima explicabo nostrum fuga non debitis non. Accusamus molestiae id fugiat inventore. Eum et sed consequatur voluptas itaque et earum.
Sed tempora suscipit dolor mollitia. Vel animi aut dolorum quasi esse dolorum corrupti. Quia aliquid esse suscipit.