Page 11 - Bank Financials (I)
P. 11
Price-to-Book-Value Ratio:
To determine how much you should pay for a bank’s shares,
you look to the price-to-book-value ratio. Depending on
where we’re at in the credit cycle, a typical bank’s shares will
trade for between 0.5 to 2.5 times book value, with 1 times
book value serving generally as the minimum threshold for
banks that earn at least 10% on their equity.
