bank profitability加拿大著名咨询公司在建设银行的讲座10

1、Profitability & Pricing1Bank ProfitabilitySession 10Profitability & Pricing2Bank Profitability3Operating Profitability3Asset Utilization3Bank FinancingProfitability & Pricing3Operating Profitability3 Profit3 Absolute profit versus relative profit?3 What are the major drivers of profit?3

2、What are the major impediments to earning profits?3 Profit/Gross Revenues3 What does this tell us?3 How can we improve the ratio?3 Operating Revenue/Operating expense3 What does this tell us?3 How can we improve the ratio?Profitability & Pricing4Asset Utilization3 Portfolio Composition3 Impact o

3、n profitability?3 Impact on risk?3 Impediments to achieving the composition you desire?3 Gross revenues/Average total assets3 What does the ratio tell us?3 How can you improve the ratio?Profitability & Pricing5Bank Financing3 Sources of borrowed funds3 Impact on interest expense?3 Impact on flex

4、ibility?3 Impact on interest rate risk?3 Impact on liquidity?3 Equity3 Forms of equity?3 Cost of the different forms of equity?3 Risks of the different forms of equity?3 Average Assets/Average Equity3 What does the ratio tell us?3 Impact on ROE?3 Impact on financial risk?Profitability & Pricing6

5、Breakdown of Bank ProfitabilityROE = Profit X Gross Revenue X Average Assets Gross Rev Average Assets Average EquityROE = Profit Margin X Gross Yield X LeverageROA = Profit Margin X Gross YieldProfitability & Pricing7Concept of Sustainable Growth3 Objective:3 To develop an internally consistent

6、strategy for bank capital growth while recognizing several constraints . . .3 Profit margin & gross yield generating capabilities3 Desired level of financial leverage3 Desired dividend payout ratio3 Issue: 3 What is the maximum growth rate that a bank can sustain on the basis of internally gener

7、ated capital, without altering its financial leverage or dividend payout ratios?Profitability & Pricing8The Growth Cycle3 Initial Conditions3 Assets $_3 Liabilities $_3 Equity$_3 Target leverage ratio_3 Asset growth target_3 Funds required to meet growth target_Profitability & Pricing9The Gr

8、owth Cycle (Cont)Asset Yield _% $_Interest Expense_% $_Other Expenses_% $_Taxes_% $_Dividends_% $_Retained Earnings_% $_Funds Required for Growth$_Funds Available for Growth:Equity$_Debt$_Sustainable Growth Rate_%Profitability & Pricing10Required Return on Equity3Net income/Average Equity3Impact

9、 of risk & return to the shareholder3The linkages between3Profits, assets & financing3ROE in different countries3Shareholder value creationProfitability & Pricing11Bank Stock Pricing3Price/Earnings Ratio3Calculation?3How do we interpret the ratio?3What is high? What is low?3Book/Market R

10、atio3Calculation?3How do we interpret the ratio?3What is high? What is low?Profitability & Pricing12ValuationValueCost of the Assets Depreciated book value Replacement costYield Capitalized earnings or dividends Realizable cash flow from: - Liquidation - Going concernMarket Direct quote Inferenc

11、e (P/E + . . . )Bargaining/ArbitrationProfitability & Pricing13Fundamental Stock ValuationCommonStock PriceDepends onEarnings per share (E)Growth rate of earnings per share (G)Dividend payout ratio (DPR)Risk (R)Profitability & Pricing14Gordon Growth Model tEPSDPRgPrg 01Where:P - Price of the

12、 common stockEPS - Earning per share at time period tDPR - Dividend payout ratiog - Growth rate of the firms dividendsr - Firm specific discount rateProfitability & Pricing15Gordon Growth Model3 Points to remember:3 Must always use the cash flow at time period 1, not at time period zero3 The pri

13、ce of the stock is simply the present value of the expected future cash flows to the investor. 3 The investors cash flows are the dividendsProfitability & Pricing16Gordon Growth Model3 Example: Assume that the Widget Corporation has earnings per share of $2.00 at time period zero (today). The fi

14、rms earnings have been growing at 5% per year for the last ten years. The firm has a history of paying out 50% of its earnings in the form of dividends. If the investors required return on equity for holding Widget Corporation common stock is 15%, what price should the investor pay for Widget stock?

15、Profitability & Pricing17Gordon Growth Model tEPSDPRgPrg.$. 012 00501 05150510 50The solution:The investor should pay $10.50 per share for Widget stockProfitability & Pricing18Growth-Valuation MatrixEXPAND ASSETS Look for acquisitions & invest surplus in securitiesEXPAND FINANCINGIssue e

16、quity or attract deposit flowsRESTRUCTURE LIABILITIES redeem high cost funds increase dividendsRESTRUCTURE ASSET PORTFOLIO Divest unprofitable activity Refinance to decrease costROE/COEGa/GsGa/GsROE - Return on EquityGa - Actual growth rate of assetsCOE - Cost of EquityGs - Sustainable growth rate of assets1Profitability & Pricing19Dividend Policy3Country tax rules3Dividends & value3Sustainable growth againProfitability & Pricing20Eleme