See original
A Discussion on AAVE's Valuation
The market value of banks
The calculation of the market value of commercial banks is often quite complex, but I found a method that, while not rigorous, is simple and effective:
Commercial banks with total deposits reaching 10 billion yuan can theoretically earn 1 billion yuan in profit each year. A company with a stable annual income of 1 billion yuan can be valued at least at 10 billion yuan. Therefore, the market value of commercial banks is approximately 10% of their customers' total deposits.
For example:
HSBC's total deposits are approximately $1.63 trillion, with a market value of $162.7 billion, and profits over the past 12 months amount to $16.3 billion. I also found some banks with deposit sizes of $30 billion, and they are basically similar.
The calculation of the market value of commercial banks is often quite complex, but I found a method that, while not rigorous, is simple and effective:
Commercial banks with total deposits reaching 10 billion yuan can theoretically earn 1 billion yuan in profit each year. A company with a stable annual income of 1 billion yuan can be valued at least at 10 billion yuan. Therefore, the market value of commercial banks is approximately 10% of their customers' total deposits.
For example:
HSBC's total deposits are approximately $1.63 trillion, with a market value of $162.7 billion, and profits over the past 12 months amount to $16.3 billion. I also found some banks with deposit sizes of $30 billion, and they are basically similar.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
AAVE
216.9
+6.21%
Replies 0