Bank Valuation: Navigating Leverage, Risk, and Regulation

Roberto Moro-Visconti ()
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Roberto Moro-Visconti: Catholic University of the Sacred Heart

Chapter 13 in Augmented Corporate Valuation, 2026, pp 577-624 from Springer

Abstract: Abstract This chapter develops a practical toolkit for valuing financial institutions with opaque balance sheets, high leverage, and tight supervision. It explains why conventional discounted cash flow methods misfire, and instead emphasizes adjusted tangible book value, normalized profitability, and capital adequacy as primary anchors. The discussion integrates business model diagnostics, asset quality assessment, regulatory capital analysis, and stress-scenario modeling to link earnings power with downside resilience. A structured due diligence framework highlights red flags in credit, funding, governance, and regulation, providing practitioners with realistic valuation ranges rather than false precision. The chapter addresses fintech entrants and special situations in distressed institutions.

Keywords: Asset quality; Capital adequacy; Price-to-book ratios; Stress testing; Fintech disruption (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-17903-6_13

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DOI: 10.1007/978-3-032-17903-6_13

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