Valuing Banks A New Corporate Finance Approach [Hardcover]

This book aims to overcome the limitations the variations in bank-specifics impose by providing a bank-specific valuation theoretical framework and a new asset-side model. The book includes also a constructive comparison of equity and asset side methods. The authors present a novel framework entitled, the Asset Mark-down Model. This method incorporates an Adjusted Present Value model, which allows practitioners to identify the main value creation sources of a particular bank: from asset-based cash flow and the mark-down on deposits, to tax benefits on bearing liabilities. Through the implementation of this framework, the authors offer a more accurate and more specific approach to valuing banks.

Contents

 

 

List of Tables

 

List of Figures

 

Acknowledgements

 

About the Authors

 

Preface

 

Introduction

 

1. Valuation inBanking: issues and models

 

1.1 Introduction

1.1.1 A different roleof equity: the regulatory constraints

1.1.2 The role of debt

1.1.3 Loan loss provisioningand charge-offs

1.1.4 Cash flowestimation

 

1.2 Valuation Methodsof Banks: a critical review

1.2.1 Discounted cashflow models

1.2.2 Excess returnsvaluation

1.2.3 Asset andmixed-based valuation

1.2.4 Relative marketvaluation

1.2.5 Contingent claimvaluation

 

1.3 Conclusions