SCGLY
Société Générale S.A.
$15.90
Banks, Insurers & Asset Managers
90%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 21.2% below fair value
You pay
$15.90
Bear
$12.28
Fair
$20.19
Bull
$24.93
Bear
$12.28
-22.7%
ROTCE 8.3% → 0.75x TBV
Fair
$20.19
+27.0%
ROTCE 11.1% → 1.23x TBV
Bull
$24.93
+56.8%
ROTCE 12.7% → 1.51x TBV
Key Value Driver
ROTCE (11.1%) vs. cost of equity (9.8%)
Implied Market Multiple
0.97x
Summary
With ROTCE of 11.1% vs. 9.8% cost of equity, fair P/TBV is 1.23x on $16.47 tangible book, implying $20.19 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 1.1536 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