Amazing video.. read a lot of articles on banking valuation but couldn't understand why dcf won't work for banks.. this video finally provides all the answers.. great work!!
WOW! You explained everything in this video in such an easy format. Can't believe this has got only 7000views! But I wholeheartedly thank you for putting out this video!
This video is absolutely gold for the students of valuation like me who are trying to climb the mountain of bank valuation. Very comprehensive video thank you finShiksha for this beautiful beautiful video
Thanks for the video ! Great one ! Quick Summary of some very interesting stuffs (to me) mentioned in case useful to others: - The Dividend Discount Model (DDM) may not be suitable due to the absence of a steady-state dividend in emerging economies - Earnings cannot be used as cash flow to equity holders because it would imply constant book equity, hindering future bank growth - which is not the reality. So earnings can't be used for any kind of DCFs on banking valuation. - Price to earnings ratio can be distorted by provisions, with banks making more provisions appearing safer but potentially screening as not a buy due to lower EPS and higher PE ratio. So P/E can't be used, leaving P/B - the key ratio relevant for banking industry. - Banks with higher book value indicate higher financial assets over liabilities, setting the stage for future growth. - Higher book equity implies potential to increase asset size and potential for future growth.
How do we quantify Stock Dividend while following the DDM model? Banks do not always pay cash dividend, sometimes its just stock, sometimes its a mixture of both.
Amazing video.. read a lot of articles on banking valuation but couldn't understand why dcf won't work for banks.. this video finally provides all the answers.. great work!!
Glad it was helpful!
WOW! You explained everything in this video in such an easy format. Can't believe this has got only 7000views! But I wholeheartedly thank you for putting out this video!
Glad it was helpful!
Very informative and a very high quality content. Thank you.
Glad it was helpful!
This video is absolutely gold for the students of valuation like me who are trying to climb the mountain of bank valuation. Very comprehensive video thank you finShiksha for this beautiful beautiful video
Thanks a ton! We will be coming up with an updated version of this soon!
This is phenomenal. Thanks @FinShiksha.
Amazing work. Very comprehensive.
Thanks for the video ! Great one ! Quick Summary of some very interesting stuffs (to me) mentioned in case useful to others:
- The Dividend Discount Model (DDM) may not be suitable due to the absence of a steady-state dividend in emerging economies
- Earnings cannot be used as cash flow to equity holders because it would imply constant book equity, hindering future bank growth - which is not the reality. So earnings can't be used for any kind of DCFs on banking valuation.
- Price to earnings ratio can be distorted by provisions, with banks making more provisions appearing safer but potentially screening as not a buy due to lower EPS and higher PE ratio. So P/E can't be used, leaving P/B - the key ratio relevant for banking industry.
- Banks with higher book value indicate higher financial assets over liabilities, setting the stage for future growth.
- Higher book equity implies potential to increase asset size and potential for future growth.
Thanks for summarizing! Glad you found the video useful.
Please make this type of video for every sector. Very interesting and amazin explanation...
Informative video, thank you for it!
Superb clarity and explanation!!
Glad you liked it
Superbly Articulated !
Best thing i found
Glad you liked it.
Excellent talk.
How do we quantify Stock Dividend while following the DDM model? Banks do not always pay cash dividend, sometimes its just stock, sometimes its a mixture of both.
very informative video.
I got my anwser today why dcf not working with banks
Amazing
Thank you sir for upload .yes bank in 2020:)
Superb 🙂 thnk u
Why its not calculated in percentage terms to do the comparison ?
Yes Bank is certainly shocking
Does it cover valuation of bank liability
thnx and plz expln with examples
Why have you stopped posting videos?
Before Yes Bank saga 😝😝😝😝
This shows that on paper valuation is not everything
Yes bank...?????
Data is not always correct
Yes bank 😂😂😂