AAVMY
ABN AMRO Bank N.V.
$42.84
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 16.5% above fair value
You pay
$42.84
Bear
$19.09
Fair
$36.78
Bull
$47.40
Bear
$19.09
-55.4%
ROTCE 6.2% → 0.51x TBV
Fair
$36.78
-14.1%
ROTCE 8.3% → 0.98x TBV
Bull
$47.40
+10.6%
ROTCE 9.6% → 1.27x TBV
Key Value Driver
ROTCE (8.3%) vs. cost of equity (8.4%)
Implied Market Multiple
1.15x
Summary
With ROTCE of 8.3% vs. 8.4% cost of equity, fair P/TBV is 0.98x on $37.37 tangible book, implying $36.78 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 (8.4%). 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 1.1376 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