Banks Sector Primer
A 44-page primer plus Excel model on bank equity valuation: P/TBV against ROTCE, CET1 headroom, net interest margin, credit discipline and screening.
PDF Only
The full primer in PDF format
£25 / ~$32- ✓ 44-page sector primer
- ✓ Worked valuations
- ✓ Screening thresholds
Excel Model
Plug-and-play valuation template
£45 / ~$58- ✓ Pre-built valuation model
- ✓ Sensitivity tables
- ✓ Scenario toggles
PDF + Model
Everything you need in one package
- ✓ 44-page sector primer
- ✓ Valuation model (.xlsx)
- ✓ Save £11 vs buying separately
Three primers, three Excel models
Banks, Insurance, and Alternative Asset Managers. Everything at ~25% off
Inside the primer
The 15-section contents, a worked valuation page, and the Excel dashboard.
Table of Contents
- 01 How Banks Make Money
- 02 Listed Bank Types
- 03 The Regulatory and Capital Ladder
- 04 Segments and Sub-Markets
- 05 Revenue Drivers: Worked Example
- 06 Cost Structure: Efficiency and Credit
- 07 Valuation Frameworks
- 08 Worked Example: Residual-Income Valuation
- 09 Worked Example: The Capital Walk
- 10 Banks Outside the United States
- 11 Applied Cases: ROTCE, P/TBV and NIM
- 12 Applied Cases: CET1, Efficiency and Credit
- 13 Key Metrics and Screening
- 14 Risks, Benchmarks and Case Study
- 15 Glossary and Cheat Sheet
44 pages · 15 sections · 3 worked banks
The Excel model
Educational material for professional use. This primer and its model are not investment advice or a recommendation to buy or sell any security, and they are not personalised. Worked valuations use illustrative calibrations, not fair-value estimates for any company.
Banks earn a spread on loans funded by deposits, plus fee income on top, and hold capital against the risk that borrowers do not repay. Tangible book value anchors the balance sheet, so equity investors price a bank on how much return it can sustain on that book rather than on earnings alone. Price-to-tangible-book-value follows return on tangible common equity: a bank compounding tangible book at a high sustainable rate earns a premium multiple, one compounding it slowly does not. Capital adequacy sets the ceiling on how much of that return reaches shareholders as dividends and buybacks, and net interest margin plus credit costs decide whether the return is sustainable at all.
The primer builds the tools in order: the listed bank types, the regulatory and capital ladder that sets minimum CET1, the segment and revenue build, then the efficiency ratio and credit-cost side of the cost structure. Two worked examples run a residual-income valuation and a full annual capital walk from first input to the resulting multiple, covering a money-centre bank, a super-regional and a bank still working through a cost turnaround, before applied cases on JPMorgan Chase, Bank of America, Wells Fargo, US Bancorp, PNC and Citigroup. Screening closes with P/TBV bands against sustainable ROTCE, CET1 headroom and the credit-cycle read.
Free guides on the site cover the individual pieces, so you can revise one idea without reopening the PDF: P/TBV vs ROTCE, net interest margin, CET1 and bank capital, the efficiency ratio and net charge-offs and the credit cycle. Research profiles for JPM, BAC, WFC, USB, PNC and C run the same screens on filed results. The companion Excel model spans twelve sheets, from three worked bank tabs through the capital walk and NIM and efficiency screens to a live sensitivity grid, so swapping in your own bank rebuilds the valuation from the capital walk up.
Sheets: Quick Start, Instructions, Assumptions, Bank 1, Bank 2, Bank 3, Valuation Summary, Capital Walk, NIM & Efficiency, Credit Cycle, Sensitivity, Dashboard.
See this methodology applied to a real company:
JPMorgan Chase (JPM) →