AAVMY
ABN AMRO Bank N.V.
$39.17
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Overvalued
Trading 2.9% above fair value
You pay
$39.17
Bear
$19.75
Fair
$38.05
Bull
$49.03
Bear
$19.75
-49.6%
ROTCE 6.2% → 0.52x TBV
Fair
$38.05
-2.9%
ROTCE 8.3% → 1.00x TBV
Bull
$49.03
+25.2%
ROTCE 9.6% → 1.28x TBV
Key Value Driver
ROTCE (8.3%) vs. cost of equity (8.3%)
Implied Market Multiple
1.02x
Summary
With ROTCE of 8.3% vs. 8.3% cost of equity, fair P/TBV is 1.00x on $38.22 tangible book, implying $38.05 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.
Return on equity (8.3%) is below the minimum investors require (8.3%). This means the bank is worth less than the net assets on its books.
Financial statements were converted from EUR into USD using EURUSD at 1.1635 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