Introduction to Bank Valuation

Introduction to Bank Valuation Overview

Valuation is probably the most fundamental concept in finance and is a necessary skill to become a world-class financial analyst. Due to the nature of a bank’s operations, as well as banking regulations, we have to modify the most common valuation approaches. In this course, we will build a dividend discount model, a residual income model, mark a bank’s balance sheet to market value and discuss comparable valuation.

Introduction to Bank Valuation Learning Objectives

Upon completing this course, you will be able to:

• Understand how a bank differs from a regular company
• Comprehend why enterprise value is a meaningless metric for a bank
• Factor regulatory capital requirements into a dividend discount model
• Learn how to value a bank that doesn’t pay a dividend
• Use similar banks and return on equity to value a bank’s equity
• Mark a bank’s balance sheet to market value

Recommended Prep Courses

These preparatory courses are optional, but we recommend you complete the stated prep course(s) or possess the equivalent knowledge prior to enrolling in this course:

1.  Introduction to Business Valuation
2.  DCF Valuation Modeling
3.  Comparable Valuation Analysis
4.  Reading and Analyzing a Bank’s Financial Statements

Who Should Take This Course?

Introduction to Bank Valuation is perfect for investment bankers, equity research analysts, private equity, and corporate development professionals.