APPROACHES AND METHODS OF ASSESSING MARKET VALUE OF COMMERCIAL BANK | Журнал правовых и экономических исследований

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APPROACHES AND METHODS OF ASSESSING MARKET VALUE OF COMMERCIAL BANK



A.V. Yesipov
av.esipov@mail.ru
senior lecturer at the Department of Banking Business and Innovation Financial Technologies of International Banking Institute, PhD in Economics, associate professor
St. Petersburg

Keywords:

  • market value of banking business
  • liquidation value
  • due diligence
  • cost approach
  • income approach
  • comparative approach
  • net assets method
  • capitalization method
  • cash flow discounting method
  • discount rate
  • The relevance of the research is determined by the need to develop the methodology of assessing the market value of banking business taking into consideration its high exposure to specific risks.
    We research the application of cost, income and comparative approaches and appropriate methods to assess a bank. We analyze the correlation between the market value and the risks that a bank takes; the sufficiency of own bank capital and the reserves to cover possible loss.
    We use the methods of comparative analysis, classification, system approach to research the problem of choosing the methods of assessing bank market value. Based on the analysis of the applied approaches and methods of evaluating a business we offer guidelines concerning the use of methods of cost and income approaches, calculating the discount rate when assessing the market value of credit organizations.

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