AAVMY
ABN AMRO Bank N.V.
$45.38
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 19.5% above fair value
You pay
$45.38
Bear
$19.71
Fair
$37.98
Bull
$48.94
Bear
$19.71
-56.6%
ROTCE 6.2% → 0.53x TBV
Fair
$37.98
-16.3%
ROTCE 8.3% → 1.03x TBV
Bull
$48.94
+7.8%
ROTCE 9.6% → 1.33x TBV
Adjust Assumptions
8.3%
8.2%
Key Value Driver
ROTCE (8.3%) vs. cost of equity (8.2%)
Implied Market Multiple
1.23x
Summary
With ROTCE of 8.3% vs. 8.2% cost of equity, fair P/TBV is 1.03x on $36.90 tangible book, implying $37.98 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Financial statements were converted from EUR into USD using EURUSD at 1.1232 USD per EUR.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly