Bank Valuation of Fee Based Business

Overview

The fee based business of most banks dont suffer from the same challenges as the asset management side. That is, the standard techniques of firm valuation are usually applicable.

• Discounted Cash Flow - if the cash flows ( revenenues and expenses) from the fee based business can be identified, then discounted cash flow models can be applied
• Relative Valuation - if other firms that provide the same set of services as the fee based business can be identified, then the techniques of relative valuation are applicable.