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Bank Valuation: Understanding Key Ratios and Metrics

Tom Spencer

Image 1: Illustrative example of a bank’s net interest income and margin Source: CIBC’s 2022 Annual Report 1.2 It’s also important to note that TSR is influenced by various factors beyond a bank’s direct control, such as market conditions, industry trends, and investor sentiment. All else being equal, a lower number is better.

Metrics 88
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Bank Profitability: Decoding the Income Statement

Tom Spencer

Firstly, by outlining the major items on a bank’s income statement, and then by discussing key ratios that are commonly used to measure profitability and to estimate the market value for banks. The interest rate set by the central bank serves as a benchmark or reference rate for banks. the spread). Common Equity Tier 1 (CET1) ratio).

Banking 88
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China Interest Rate Crisis Continues: 7-Day Interest Rate Doubles to 10% in One Week; China Bans Words "Cash Crunch"

MishTalk

The New York Times reports China Rates Approach Crisis Levels Despite Central Bank Measures. Rates continued to surge on Monday, however, in China’s money markets — a key source of short-term funding for commercial banks and also for financial institutions engaged in risky, off-balance-sheet shadow lending.

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Customer intent is a treasure trove of actionable data hiding in plain sight

1 to 1

Insights into what customers want and need are more important than ever as the economy and market conditions change. One of the ways that his company is improving its customer experience, particularly in the digital space, is by providing greater personalization through automation and marketing analytics, according to Lee.

Data 29
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BIS Slams the Fed; Ridiculous Question of the Day: "Is The Fed Going To Attempt A Controlled Collapse?"

MishTalk

The question stems from lengthy (256 page PDF) from the BIS Annual Report (Bank for International Settlements) that stated among other things " The only source of lasting prosperity is a stronger supply side. The BIS slam, coupled with a recent stock market selloff, brought up debate on a " controlled collapse ".

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Pettis on Strains in China's Banking System; Avoiding the Fall

MishTalk

While the benchmark deposit rate was officially lowered from 3.00% to 2.75%, the upper limit that banks can pay for deposits remained unchanged at 3.30%. It may seem strange to have both a benchmark rate and a “floating range” that establishes a cap, instead of just setting a cap, as was the case until very recently.

Banking 71
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You Don’t Need to Be a Silicon Valley Startup to Have a Network-Based Strategy

Harvard Business

A platform connects providers and users in a multisided market. A platform can be a business platform (a multisided market), a software platform (a cloud-based subscription service), or an engagement platform, (a user-generated community). For most companies intellectual property is something that sits on their balance sheet.