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The Deal Room: How do you value a bank like J.P. Morgan?

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Join us as we dissect HSBC's recent earnings report to demystify financial statements and explore the valuation process used for banks.


From a career perspective, we shine a spotlight on the Financial Institutions Group (FIG) and delve into the unique role of a FIG analyst compared to other sector teams.


If you're aspiring to a career in investment banking, this episode is a must-listen! 


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FIG refers to the Financial Institutions Group, which is a sector within banking that focuses on providing specialised services to financial institutions.


NIM, or Net Interest Income, is the difference between interest earned from assets like loans and interest paid on liabilities such as deposits.


Net fee income represents the revenue generated by a financial institution from fees charged for services provided to clients, after deducting related expenses.


Net operating income is the total revenue earned by a company from its core business operations, minus operating expenses.


EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization, representing a company's profitability before accounting for non-operating expenses.


DCF, or Discounted Cash Flow, refers to the method of valuing an investment by estimating its future cash flows and discounting them to present value using a specified discount rate.


Enterprise Value is a measure of a company's total value, calculated as market capitalization plus debt, minority interest, and preferred shares, minus cash and cash equivalents.


Free cash flow represents the cash a company generates after accounting for capital expenditures necessary to maintain or expand its asset base.


Price/earnings (P/E) ratio is a valuation metric calculated by dividing a company's stock price by its earnings per share, indicating how much investors are willing to pay for each dollar of earnings.


Price/book (P/B) ratio compares a company's stock price to its book value per share, reflecting the market's valuation of a company relative to its accounting value.


Price/Tangible Book Value compares a company's stock price to its tangible book value per share, excluding intangible assets, providing insight into the market's valuation of a company's tangible assets.


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