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A Critical Assessment on Bank Valuation in Existing Literature in the Last Decade

Author

Listed:
  • Antonio J. Dayag

    (University of Sto. Tomas (UST), Espaňa, Manila)

  • Fernando Trinidad

    (University of Sto. Tomas (UST) Graduate School, Espaňa, Manila)

Abstract

This paper examines vast literature covering bank valuation practices, frameworks, and various factors that impact bank valuation. Researches on bank valuation covering the last 10 [ten] years were made, and there appear to have a certain level of conservatism on how to measure value of banks. This could be due to the recent global financial crisis, and what is common among the studies was, discourage banks from taking on additional risks. Different factors impact bank valuation and it depends on country and economic circumstances, including banking regulations and internal governance. Various bank valuation frameworks were also added from extensive researches gathered. The literature review also identified nine [9] variables that impact bank valuation, seven [7] of which are bank-specific attributes, one [1] is regulation related, and one [1] is macroeconomic. Future researches may use these variables and validate significance using statistical methods. Key Words:Bank Valuation, Valuation methods, Bank Value, Factor Impacting Valuation

Suggested Citation

  • Antonio J. Dayag & Fernando Trinidad, 2019. "A Critical Assessment on Bank Valuation in Existing Literature in the Last Decade," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 8(4), pages 44-58, July.
    • Handle: RePEc:rbs:ijbrss:v:8:y:2019:i:4:p:44-58
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    References listed on IDEAS

    as
    1. Zelong He & Jijun Niu, 2018. "The effect of economic policy uncertainty on bank valuations," Applied Economics Letters, Taylor & Francis Journals, vol. 25(5), pages 345-347, March.
    2. Sinha, Pankaj & Sharma, Sakshi & Sondhi, Kriti, 2013. "Market Valuation and Risk Assessment of Indian Banks using Black -Scholes -Merton Model," MPRA Paper 47442, University Library of Munich, Germany.
    3. Calomiris, Charles W. & Nissim, Doron, 2014. "Crisis-related shifts in the market valuation of banking activities," Journal of Financial Intermediation, Elsevier, vol. 23(3), pages 400-435.
    4. Bertsatos, Georgios & Sakellaris, Plutarchos & Tsionas, Mike G., 2017. "Did the financial crisis affect the market valuation of large systemic U.S. banks?," Journal of Financial Stability, Elsevier, vol. 32(C), pages 115-123.
    5. Guerry, Nicolas & Wallmeier, Martin, 2017. "Valuation of diversified banks: New evidence," Journal of Banking & Finance, Elsevier, vol. 80(C), pages 203-214.
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