SMC Global Securities Limited
- No D64/127 CH, 2nd Flr, Arihant Complex, Shivapurva
Sigra
Varanasi - 221010 -
- Opens at 09:00 AM
- Call Get Direction
- Branch Office
Looking for a Better Demat Account
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4️⃣What influences a Bank’s P/B ratio? A higher P/B isn’t always bad. It may mean: 🔷Higher ROE (Return on Equity) 🔷Better asset quality (low NPAs) 🔷Strong CASA base (cheap funds) 🔷Brand trust & management quality 🔷Future growth visibility 👉In simple terms: You pay more https://t.co/1pfPh5JuST
Bonus tip: Read the book "The Little Book of Valuation" by Aswath Damodaran https://t.co/LPAl5nAVSB
7️⃣What’s an ideal P/B to look for? There’s no magic number — but here’s a framework: 🔹 Large Private Banks: P/B of 2–4 (with strong ROE) 🔹 PSU Banks: P/B of 0.5–1.5 (due to inefficiencies) 🔹 Small Finance / NBFCs: Highly variable — watch for NPAs & capital adequacy 👉Always
5️⃣How to interpret it with Return on Equity (ROE)? This is the sweet spot — combining P/B with ROE 🔷High ROE + Low P/B = Undervalued gem 🔷Low ROE + High P/B = Risky valuation 🔷High ROE + High P/B = Market confident in future A bank with ROE > 15% can justify a P/B > 2 But