Evaluation of financial institutions

Product description

Task 1

As from 01.01.05 G., "Bank "Revival" had Fund balances in credit organizations in the amount of 1 003 676 thousand RUB, including the following banks (the conditional example):

Table. 1. Amounts due from credit institutions

The borrower issue date maturity date interest Rate, % Carrying amount from 01.01.05, thousand RUB

...

You want to calculate as from 01.01.05, the market value of funds placed in credit organizations, with the following data:

• interest payments on loans are paid annually;
• the principal repayments are made at the end of the term of the loan;
• the average market rate for similar loans is 10%.

Task 2

Determine the cash flow going to the increase (decrease) in the balance of commercial banks in the first forecast period based on the following data.

Table. 2. The source data

№ p/p the Indicator the Reporting date 01.01.2005 Forecast period

1 return on equity ROE 0,13 0,13

...

4 profit Margin 0,07 0,07

...

Liabilities, thousand RUB 82 683

Checklist:

• Describe the main features of the activities of financial institutions and their evaluation.
• Describe spread-a model of the cashflows of the commercial Bank, specify its advantages and disadvantages.
• What are the estimated multipliers used in comparative approach to the valuation of a commercial Bank, and the reasons for their use in this assessment.