Bank valuation using the income approach

[Mimaktsa10]

Let us consider the definition of the discount rate for assessing a credit institution using the income approach using an example.

Regional Bank OJSC operates in one of the regions of the central part of the Russian Federation. Its positions in comparison with other participants of the regional banking system are typical.

At the time of the assessment, July 1, 2006, the accepted risk-free rate was 9.76% (5.76% + 4%), and the range of change of all adjustments was limited to values ​​from 0 to 5% (this practice had developed by that time). Thus, when determining the adjustment coefficient for the size of the bank being assessed, specialists were guided by the organization's place in the rating, compiled on the basis of "amount of total assets".

The financial institution argentina email list was not included in the top five hundred, and therefore its share was considered insignificant. At the same time, its importance in the region could not be ignored. As a result, the average size was chosen - 2.5%. After a detailed examination of the credit institution, the quality of management mark was set at 2.35%.

In order to determine the value of the correction coefficient for the financial structure of capital, calculations were made based on the level of adequacy of banking capital (in accordance with the requirements of the Central Bank of the Russian Federation) and the dynamics of this indicator in the analyzed period. The H1 standard exceeded the maximum required level by 14% and amounted to 17.9% on July 1, 2006.

Having traced its downward dynamics, experts put forward hypothetical assumptions about the reduction of this indicator in the next reporting period. Based on this, the adopted amendment turned out to be one and a half percent less than the average value and equals 1%.


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Two components were also included in the diversification adjustment. Investing in different assets was considered from the perspective of:

territorial;

commodity.

The maximum for each was 2.5%. And in the first case it remained unchanged, since the regional status of the credit institution assumed the implementation of the main operational volume in the territory of one region of the country. And the adjustment for product diversification was reduced due to the wide range of services provided by the banking organization, and was equal to 1%. The total amount of the adjustment for diversification was 3.5%.

Based on the analysis of the number of clients and the conclusion about the sustainability of the degree of client diversification, the size of the adjustment for client diversification was determined to be 1.5% (1% less than the average).