Chapter 5
ALTERNATIVE MODELS OF BANK PERFORMANCE （各類績效與評價模型）
Traditional bank performance analysis carries three basic flaws（缺點）
1. It ignores the wide diversity in strategies（忽略各種 不同策略） pursued by different institutions
2. A bank‟s total assets no longer serve as a meaningful yardstick（總資產不再是有意義的標竿） when banks engage in off-balance sheet activities
3. The analysis provides no direct information
Market and economic value added
• MVA represents the increment to market value and is determined by the present value of current and expected economic profit:
率）
= (Dprice + dividends) / pricet-1 • Earnings per share（本益比）
ΔNI after taxes and dividends on preferred stock number of shares of common s tock outstanding
concerning how or which of the bank‟s activities contribute to the creation of shareholder value
（不能直接回答那些銀行的行為導致股東權益價值增加）
The appropriate peer group（適當的同業）
A common starting point is to determine whether the bank’s strategy is more loandriven or deposit-driven.
A loan-driven（放款驅動） bank’s profitability
is generally a function of net interest income (the margin) with loan volume a major factor. A deposit-driven（存款驅動） bank’s profitability is generally a function of noninterest income with franchise（特許權） value and deposit volume a major factor.
MVA = Mkt Value of Capital - Hist. Amt of Invested Capital
• Stern Stewart and Company measures economic profit with EVA, which is equal to a firm's operating profit minus the charge for the cost of capital:
EVA = Net Operating Profit After Tax (NOPAT) - Capital Charge
where the capital charge equals the product of the firm‟s value of capital and the associated cost of capital.
• Free Cash Flow =
EBIT(1 T ax rate) Depreciati - Investment on
年 EBIT EBIT(1-t) 折舊 投資 現金流量
1 2 3 4 5 6
100 98 96 95 96 95
64 63 61 61 61 61
160 170 170 160 150 140
Difficulties in measuring EVA for the entire bank
• It is often difficult to obtain an accurate measure of a firm„s cost of capital. （資本成本難以準確預估） • The amount of bank capital（銀行資本） includes not just stockholders„ equity （業主權益）, but also includes loan loss reserves （放款損失提存）, deferred (net) tax credits （遞延稅負）, non-recurring items（非循環項目） such as restructuring charges （重建費用） and unamortized securities gains（不定期的資本利 得）. • NOPAT should reflect operating profit associated with the current economics（現金基礎） of the firm. Thus, traditional GAAP-based （應計基礎）accounting data, which distort true profits, must be modified to obtain estimates of economic profit.
• Stern, Stewart & Company has introduced the concepts of market value added (MVA) and its associated economic value added (EVA) in an attempt to directly link performance to shareholder wealth creation.
EVA calc ulati on For Ame riba nk
A. Balance Sheet Assets Cash Securities Commercial loans Credit card loans -Loss reserve Other assets Total assets
$Millions $150 $800 $2000 $1900 -$100 -$250 $5,000
• Price to earnings (P/E) = stock price / EPS • Price to book value（價帳比） = stock price / book value per share
Market value calculate by cash basis（現金基礎計算市價）
Rate 0 6.5% 9.0% 10.0%
Liabilities & Equity Demand deposits MMDAs CDs Small time deposits Deferred tax credits Equity Liabilities + equity
Maximizing the Market Value
E(Dt ) P0 (1 r) t t 0

D0 (1 g ) P 0 kg
Key stock market-based performance measures include
• Return to stockholders （股東權益報酬
One way to construct ratios that avoid the problems of off-balance sheet activities is to calculate ratios tied to a bank’s total operating revenue（營業收益） (net interest income plus noninterest income)-- (David Cates (1996))
…as long as banks have a similar strategic focus and offer similar products and services, asset size and UBPR ratios can provide meaningful comparisons.
Efficiency Ratio（效率比率）
= noninterest expense / net operating revenue
where net operating revenue = the sum of net interest income + noninterest income.

To identify the appropriate peer institutions, management should consider the following:
1. 2.
3.
What is the bank’s strategic focus（主要策略）? What are the traditional balance sheet and off-balance sheet characteristics of firms with this focus（偏重表外或表內操作）? How do the bank’s activities affect its operating revenue（銀行透過何種行為影響營運收益）?
Economic value added（經濟價值增加法） (EVA) …an approach to measuring performance that compares a bank’s (or line of business) net operating profit after-tax (NOPAT) with a capital charge（資本費用）.