IB INTERVIEW FOUNDATIONS
Bank valuation
Use metrics consistent with the economics of a financial institution.
A bank operates through financial assets and funding liabilities. Interest and deposits are central operating inputs, so mechanically applying an industrial company enterprise-value bridge can mislead. Equity-based metrics need interpretation through sustainable returns, capital adequacy and asset quality.
Ask yourself: Is a low price-to-book multiple cheap—or compensation for weak returns or asset risk?
Put it into practice
This is an introductory P/B exercise, not a complete bank valuation curriculum. Use the follow-up to identify missing diligence.
Beyond the calculation
State assumptions before calculating. Explain the result in plain English, then identify what information could change your conclusion. A numerical match alone does not show that your reasoning is sound.