Joined: 01/Jan/2006
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Posted: 27/Sep/2007 at 12:39pm
A lot. That is because Centurion bank seems to be incurring a lot of cost compared to the other privates ector banks. Many a times these costs are fixed or one time in nature if that is so then in the coming years these costs would either come down or get distributed over a larger income.
ALso no discussion in banking stocks can be initiated without talking of Global Trust Bank. can anyone highlight what went wrong with GTB. This link indicates that the smart money exited GTB a bit before the doom:
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Joined: 29/Mar/2007
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Posted: 27/Sep/2007 at 2:55pm
Not exactly related to this discussion but - do you think we'll ever see a i-bank like Lehmann Bros, Bear Stearns, Morgan Stanley or Goldman Sachs coming out of India?
Not exactly related to this discussion but - do you think we'll ever see a i-bank like Lehmann Bros, Bear Stearns, Morgan Stanley or Goldman Sachs coming out of India?
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Smart query. This can only happen, if our INR becomes global currency like $, euro or yen. Indian entrepreneurs have all other ingredients. By the way YES Bank was sole agency for RE-Power takeover. These people were behind tetley-tata tea takeover though Rabo India but meaningful muscle will come once our currency is ....
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Posted: 28/Sep/2007 at 8:18pm
NIM captures the cost of funds.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
My question is how to value a bank like Yes Bank....Different house is using different valuations.Whether its P/BV, PE ,etc???
"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
Joined: 01/Jan/2006
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Posted: 29/Sep/2007 at 2:20pm
P/ABV is good for banks that have a majority of interest income but forbanks that have diversified into the non interest income space P/ABV is not the way to go because if that is the case the stock price would go up each time there is an equity dilution.
Since equity would be diluted at above book value and closer to market price each diliution would tend to jack up the book value.
So PE is the way to go depending on the quality of a banks earnings. If we are for that matter evaluatinmg a Allahabad Bank then we know that majority of its earnings is interest income so there is no element of intellectual property involved therefore we would go by P/ABV.
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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