The ABCs of bank PBRs
Ingo Fender and
BIS Quarterly Review, 2018
Price-to-book ratios have been unusually low for many banks since the Great Financial Crisis. Ratios below one, in particular, have been seen as reflecting market concerns about banks' health and profitability as well as the need for shifts in business models. But what drives these valuations globally? What explains consistently low levels for some banks and jurisdictions? This special feature proposes an empirical valuation methodology based on the intangible value attached to bank assets and liabilities. Our model fits the data well across time and banks, suggesting that measures targeting traditional drivers of profitability, such as the proactive management of non-performing loans, remain essential in enhancing bank valuations.
JEL-codes: G21 G28 G3 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bis:bisqtr:1803h
Access Statistics for this article
BIS Quarterly Review is currently edited by Christian Upper
More articles in BIS Quarterly Review from Bank for International Settlements Contact information at EDIRC.
Bibliographic data for series maintained by Christian Beslmeisl ().