Bank Valuation: Understanding Key Ratios and Metrics
Tom Spencer
OCTOBER 13, 2023
Image 1: Illustrative example of a bank’s net interest income and margin Source: CIBC’s 2022 Annual Report 1.2 As an example, corporate lending is characterized by very low efficiency ratios (a good thing) but also low ROE given the large amount of capital charges. It is not a useful metric for comparing different business lines.
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