Valuing stocks of commercial joint stock banks - The case of Sacombank = Định giá cổ phiếu ngân hàng thương mại qua trường hợp ngân hàng Sacombank. Luận văn ThS. Kinh doanh và quản lý: 60 34 05

VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS DANG QUOC HIEP VALUING STOCKS OF COMMERCIAL JOINT STOCK BANKS – THE CASE OF SACOMBANK MASTER OF BUSINESS ADMINISTRATION THESIS Hanoi – 2010 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS DANG QUOC HIEP VALUING STOCKS OF COMMERCIAL JOINT STOCK BANKS – THE CASE OF SACOMBANK Major: Business Administration Code: 60 34 05 MASTER OF BUSINESS ADMINISTRATION THESIS Supervisor: Dr Chu Thanh Ph.D Candidate Ha Nguyen Hanoi – 2010 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) TABLE OF CONTENTS ACKNOWLEDGEMENTS i ABSTRACT ii TÓM TẮT iv List of tables viii List of figures .viii List of abbreviations ix INTRODUCTION CHAPTER 1: COMMERCIAL JOINT STOCK BANKS: INTRODUCTION TO VALUATION OF STOCK 1.1 The introduction of commercial joint stock banks 1.1.1 Commercial bank- an important intermediary financial institution 1.1.1.1 The definition of commercial banks 1.1.1.2 The financial intermediary role of commercial banks 1.1.2 The organization and operation of commercial banks 1.1.2.1 Organization and management of commercial banks 1.1.2.2 Capital of commercial joint stock banks 1.1.2.3 Some basic criteria for evaluating the operation efficiency of commercial joint stock banks 13 1.2 Legal bases and stock valuation methods 15 1.2.1 Concept of stocks and valuing stocks 15 1.2.1.1 Concept of stocks 15 1.2.1.2 The concept of valuing stocks 16 1.2.2 The legal bases for valuing stocks in Vietnam 16 1.2.2.1 Some regulations of stock valuation 18 1.2.2.2 Regulations of valuation methods 19 1.2.2.3 The regulations of land usage right 23 1.2.2.4 The regulations of specifying the advantage values 24 1.2.3 The stock valuation methods: 25 1.2.3.1 The method of dividend discount model (DDM model) 28 1.2.3.2 The discounted cash flow method (DCF) 36 1.2.3.3 The valuation method based on P/E 39 1.2.3.4 The assessment method based on the value of net assets 41 1.2.3.5 The valuation method based on P/B 42 1.2.3.6 Methods to assess banking stock 43 CHAPTER 2: ANALYSIS OF COMMERCIAL BANK STOCK VALUATION – THE CASE OF SACOMBANK 45 2.1 The establishment and development of commercial joint stock banks in Vietnam 45 2.2 General introduction of Sacombank: 46 2.2.1 Sacombank stock: 46 vi Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) 2.2.2 Some general features of Sacombank: 48 2.2.2.1 Operational cirteria of Sacombank during 2005-2009 49 2.2.3 Asia banking sector overview and forecast: 51 2.3 Valuation analysis on the stock STB 53 2.3.1 Valuing the stock STB with DDM method 53 2.3.2 Valuing the stock STB with the method of P/E coefficient: 56 2.3.3 Valuing STB with the method of net value of assets: 57 2.3.4 Analyzing the P/B coefficient of STB as of year end 2009: 58 2.4 Evaluating the results of valuing the stock STB 59 2.6 Advantages and difficulties in valuing stocks of Vietnamese commercial joint stock banks 60 2.6.1 Advantages in valuing stocks: 60 2.6.2 Difficulties in valuing stocks 61 2.6.2.1 Difficulties from commercial banks themselves 61 2.6.2.2 Difficulties from the business environment 62 2.6.2.3 The lack of understanding of investors 66 2.7 Major lessons taken out of Sacombank 67 CHAPTER 3: SOLUTIONS & RECOMMENDATIONS TO ENHANCE/ IMPROVE STOCK VALUATION OF COMMERCIAL BANKS IN VIETNAM 71 3.1 Implications for other banks 71 3.2 Recommendations to enhance the quality of banking stock valuation 74 3.2.1 Recommendations to commercial banks: 74 3.2.1.1 Developing business strategies and long term financial plans 74 3.2.1.2 Complying with rules and accounting standards 75 3.2.1.3 Setting up expertise departments for valuing stocks 75 3.2.1.4 Performing the information announcement 75 3.2.2 Recommendations to the government 76 3.2.2.1 Improving the legal framework for valuation and system of related legal documents 76 3.2.2.2 Methods related to the market information 80 3.2.3 Recommendations to investors 83 CONCLUSION 85 LIST OF REFERENCES 87 Appendix 1: Country Default Spreads and Risk Premiums 90 Appendix 2: Asia banking sector peer comparison 94 vii Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) List of tables Item Table Description Page 2.1 Operation criteria of Sacombank in the period of 2005-2009 49 2.2 Income Statement of Sacombank throughout the years 49 2.3 Key financial ratios of Sacombank throughout the years 50 2.4 Dividend payout history of Sacombank in recent years 66 2.5 ROE of Sacombank in the period of 2005-2009 66 2.6 Balance sheet of Sacombank in the quarter 4/2009 70 List of figures Item Figure Description Page 1.1 The organization of a small bank 1.2 The organization of a large bank 1.3 Valuation Models 25 1.4 SML – The Security Market Line 32 2.1 The price movement of stock STB from the quotation day to 47 25/04/2009 2.2 Asia Banking Forecast Q2/2010 52 2.3 Sacombank Beta 56 viii Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) List of abbreviations VN-Index Vietnam Index GDP Gross Domestic Products WTO World Trade Organization IPO Initial public offering P/B Price to book P/E Price to earning STB Sacombank ROA Return on asset ROE Return on equity DDM Dividend discount model DCF Discounted cash flow FCF Free Cash Flow FCFE Free Cash Flow to Equity FCFF Free Cash Flow to Firm NAV Net Asset Value EPS Earning per share SML Security Market Line WACC Weighted average cost of capital CAPM Capital Asset Pricing Model HOSE Hochiminh Stock Exchange HASTC Hanoi Stock Trading Center OTC Over the counter ix Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) INTRODUCTION The emergency and objectives of the research The reform of Vietnam has been taking place totally and deeply in many fields The event that Vietnam became the official member of the World Trade Organization (WTO) put an important mark in the integrating process into the world economy Vietnam’s economy has grown fast, in the last five years GDP of Vietnam increased by nearly 7.5% on average In that situation, the process of economic monetarilization will also take place deeper and larger, demands for financial and banking services of enterprises and especially of inhabitants will increase dramatically In recent years, the average growth rate of banking sector is 22%, times faster than the growth of GDP Besides, there is a market share transition among groups of banks, in which the market shares of commercial banks group will increase substantially After years in operation, Vietnam’s securities market has gained certain remarkable achievements; the highest VN-index reached 1070 points, then fell to the trough of 235 points The development of the securities market has made the stock valuation become necessary The stock valuation has helped small investors in Vietnam become more active, avoid the phenomenon of transacting with the “gregarious” psychology and avoid bearing risks For enterprises who conduct the initial public offering (IPO), the valuation of referential stocks for the first transaction day of the IPO firms is a necessary and extremely sensitive work This valuation may lead to success or failure of this public offering In the banking sector, a number of state-owned banks are preparing for the equatization and offering securities to the public In the mean time, there are only Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) two joint stock banks listing their stocks in the centered securities market, those are ACB and Sacombank With the objective to contribute to finding a suitable stock valuation methods for stock valuation of listed commercial banks, and from that some methods for enhancing stock valuation in the Vietnamese securities market can be recommended, I have chosen the topic “Valuing stocks of commercial joint stock banks- the case of Sacombank” The objectives of the research are to: - Present an overview of the commercial bank operations & stock evaluation methods - Provide an analysis of the STB stock with various methods - Recommend improvement plans to enhance the valuation of bank stocks Subject and scope The thesis concentrates on the valuation methods for stocks of commercial joint stock banks In which, it will specifically value the stock of Saigon commercial joint stock bank -Sacombank, one of the two banks which are listing their stocks in the listed securities market Research methodology: The author adopts both primary and secondary research methods to domestic and foreign material sources to find out basic theories about stock valuation methods, meanwhile collecting data through prospectus, financial statement, analysis reports of Sacombank…Using the systematical, statistical, analytical methods to analyze all collected data Combining studied theories, domestic legal bases with all collected results to give judgments on the application capability of valuation methods for stocks of the Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) banking sector, and to recommend some methods to enhance the stock valuation in the Vietnamese securities market at the same time The structure of the thesis The thesis is presented in three chapters in which the first chapter will give basic definitions and most general theories about the researched problem of this thesis The second chapter will apply each method presented in the first chapter one after the other to conduct the valuation of Sacombank’s stocks and give judgments about the application capability of the stock valuation methods The third chapter will give some recommendations about applying some valuation methods to evaluate stocks of the banking sector, besides, give some recommendations to enhance the quality of stock valuation in the Vietnamese securities market Chapter 1: Commercial joint stock banks: Introduction to Valuation of Stock The content of this chapter is to concentrate on giving a general overview about the system of commercial banks, legality of commercial joint stock banks in Vietnam and basic theories about stock valuation Chapter 2: Valuing stock of commercial banks – the case of Sacombank This chapter concentrates on introducing the establishment, development and operation of Vietnamese commercial joint stock banks in general and Sacombank in particular This chapter also collects preliminarily the price changes of the two banking stocks which are now being listed and then conduct applying the valuation methods in the first chapter to value the stock STB Finally, chapter will evaluate the application capability of above valuation methods in valuing stocks of banks and give out some advantages and difficulties in valuing stocks of commercial joint stock banks currently Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) Chapter 3: Some recommendations and solutions to assessing stocks of Vietnamese commercial joint stock banks This chapter concentrates on recommendations and solutions to assessing stocks of Vietnamese commercial joint stock banks Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) Third, basing on evaluating the stock STB, the thesis gives some lessons, recommendations and recommendations in order to enhance the quality of evaluating stocks of Vietnamese commercial joint stock banks Through the researched issues in the thesis, we can see that there are a lot of methods to evaluate stocks; however, to get effective results, we need to combine many methods to determine prices of stocks When valuing stocks of Vietnamese commercial joint stock banks, we should apply the method of dividend discount model (DDM) or discounted cash flow (DCF), but we also need to combine with some criteria about price in the market to have comprehensive view of that type of stock In the future, when the securities market is more developed and become stable, the stock evaluating activity will really promote their roles This requires that both enterprises and investors realize the importance of stock valuation to their investment decisions, creating conditions for the Vietnamese securities market to develop healthily and effectively However, stock valuation in Vietnam currently is facing some big difficulties because there is not a complete legal framework, the information is announced slowly and not accurate, complete, the lack of understanding of investors is also a barrier to the development of the market Hence, basing on such existences, this thesis presents some recommendations with the aim to enhance the stock valuation in the Vietnamese securities market, contributing to the development of the market in the future Since Vietnamese securities market and banking market are both on the first developing stage both theoretically and practically in comparison with the world financial market Besides, the knowledge of the writer is limited, so this thesis can not avoid some errors I really hope to receive comments, judgments from teachers, friends, and readers so that I can improve my research topic 86 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) LIST OF REFERENCES Prof Meritorious Teacher Dinh Xuan Trinh, Associate Prof Nguyen Thi Quy, “ Securities Market”, Statistics Publishing House, Hanoi 2005 Econometrics – Associate Prof PhD Nguyen Quang Dong, Statistics Publishing House, Hanoi 03-2003 Associate Prof PhD Nguyen Van Nam, Associate Prof PhD Vuong Trong Nghia, “Material on Securities market”, Finance Publishing House 2002 Frederic S.Mishkin, “Banking money and Securities market”, Science and Technology Publishing House 2001 Associate Prof PhD Luu Thi Huong, “Material on Enterprise’s Finance” Statistics Publishing House 2004 Nguyen Hai San, “Material on Enterprise’s Finance”, Statistics Publishing House 2001 MA Le Thi Mai Linh, “Material on Securities Investment”, National Political Publishing House, Hanoi 2003 Associate Prof PhD Nguyen Thi Mui, “Management of Commercial banks”, Finance Publishing House, Hanoi PhD Vu Thi Kim Lien, “Scientific bases on stock valuation methods in the Vietnamese Securities market”, The PhD Thesis 2003 10 Vu Thanh Tu Anh, “Operations of Commercial banks”, The Fulbright 2004 Economic Curriculum”, The lesson of Development Finance 11 PhD Phan Thi Thu Ha, PhD Nguyen Thi Thu Thao, “Commercial banksManagement and Operations”, Statistics Publishing House 2002 87 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) 12 Nguyen Minh Tri, High business Efficiency in the early months and the plan of increasing chartered capitals of commercial joint stock banks, “Money Finance Market No 12 (234) 15/06/2007 13 MA Pham Ngoc Lan, Equitization and Increase in chartered capitals of commercial banks – Money Finance Market No3+4 (249+250) 01/02/2008 14 Le Ba Hoang Quang, Banks’ stocks through some financial criteria, Securities Investment No 49 (521) 09/08/2007 15 Decree 187/2004/NĐ- CP issued on 16/11/2004 about transferring some State owned Enterprises to joint stock companies 16 Circular No 126/2004/TT-BTC of Ministry of Finance issued on 24/12/2004, instructing how to perform decree 187 17 Circular No 95/2006/TT-BTC amending, supplementing the Circular No 126/2004/TT-BTC instructing how to perform the decree 187 18 Decree 109/2007/NĐ- CP issued on 26/06/2007 about transferring some State owned Enterprises to joint stock companies 19 Circular No 146/2007/TT-BTC of Ministry of Finance issued on 06/12/2007, instructing how to perform the decree 109 20 Tran Viet Thang, Dinh Nhu Duc Thien, Report on Analyzing stocks of Banking sector – EPS Research 21 Report on Analyzing Vietnamese Securities Market Quarter II/2007, Viet Dragon Securities Company, VDSC 22 Report on Overview of Vietnamese listed stock market Quarter IV/2007, Bien Viet Securities company 23 Vietnam, Economy and Securities market in months of early 2007, Bao Viet Securities Company 88 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) 24 Annual Report 2006, 2007 of Sacombank 25 Announcement Statement 2006 of Sacombank 26 Financial Report Quarter I/2008 of Sacombank 27 Wayne Lonergem , The valuation of business, share and other equity, 1994 28 Richand A Brealey, Stewant C Myers , Principles of corporate finance, The McGraw Hill Companies, Inc 1996 29 Jack Clark Francis , Management of Investment , McGraw Hill, Inc 1993 30 Banking Sector Report, Vinacapital 2006 31 The article “Can the model CAPM be used in Vietnam?” on the website: http://saga.vn 32 “CAPM and the Characteristic Line” http://www.investopedia.com 33 Aswath Damodaran, Valuation A big future, http://www.damodaran.com 34 http://www.sbv.gov.vn 35 http://www.sacombank.com.vn 36 http://www.vndirect.com.vn 37 http://www.vse.org.vn 38 http://www.vnba.org.vn 39 http://www.dongasecurities.com.vn 40 http://www.cafeF.vn 41 http://www.dautuchungkhoan.com 42 http:// www.cophieu68.com 89 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) Appendix 1: Country Default Spreads and Risk Premiums Last updated: January 2010 This table summarizes the latest bond ratings and appropriate default spreads for different countries While you can use these numbers as rough estimates of country risk premiums, you may want to modify the premium to reflect the additional risk of equity markets To estimate the long term country risk premium, I start with the country rating (from Moody's: www.moodys.com) and estimate the default spread for that rating (based upon traded country bonds) over a default free government bond rate This becomes a measure of the added country risk premium for that country I add this default spread to the historical risk premium for a mature equity market (estimated from US historical data) to estimate the total risk premium In the short term especially, the equity country risk premium is likely to be greater than the country's default spread You can estimate an adjusted country risk premium by multiplying the default spread by the relative equity market volatility for that market (Std dev in country equity market/Std dev in country bond) I have used the emerging market average of 1.5 (equity markets are about 1.5 times more volatile than bond markets) to estimate country risk premium I have added this to the historical premium for mature markets of about 4.5% to get the total risk premium Country Albania Argentina Armenia Australia Austria [1] Azerbaijan Bahamas Bahrain Barbados Region Eastern Europe & Russia Central and South America Eastern Europe & Russia Australia & New Zealand Western Europe Eastern Europe & Russia Caribbean Middle East Caribbean Long-Term Adj Default Total Risk Rating Spread Premium Country Risk Premium B1 450 11.25% 6.75% B3 650 14.25% 9.75% Ba2 300 9.00% 4.50% Aaa Aaa 0 4.50% 4.50% 0.00% 0.00% Ba1 A3 A2 Baa2 250 120 105 180 8.25% 6.30% 6.08% 7.20% 3.75% 1.80% 1.58% 2.70% 90 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) Belarus Belgium [1] Belize Bermuda Bolivia Bosnia and Herzegovina Botswana Brazil Bulgaria Cambodia Canada Cayman Islands Chile China Colombia Costa Rica Croatia Cuba Cyprus [1] Czech Republic Denmark Dominican Republic Ecuador Egypt El Salvador Estonia Fiji Islands Finland [1] France [1] Germany [1] Greece [1] Guatemala Eastern Europe & Russia Western Europe Central and South America Caribbean Central and South America Eastern Europe & Russia Africa Central and South America Eastern Europe & Russia Asia North America Caribbean Central and South America Asia Central and South America Central and South America Eastern Europe & Russia Caribbean Western Europe Eastern Europe & Russia Western Europe Caribbean Central and South America Africa Central and South America Eastern Europe & Russia Asia Western Europe Western Europe Western Europe Western Europe Central and South America B1 Aa1 450 30 11.25% 4.95% 6.75% 0.45% B3 Aa2 650 60 14.25% 5.40% 9.75% 0.90% B2 550 12.75% 8.25% B2 A2 550 105 12.75% 6.08% 8.25% 1.58% Baa3 200 7.50% 3.00% Baa3 B2 Aaa Aa3 200 550 75 7.50% 12.75% 4.50% 5.63% 3.00% 8.25% 0.00% 1.13% A1 A1 90 90 5.85% 5.85% 1.35% 1.35% Baa3 200 7.50% 3.00% Ba1 250 8.25% 3.75% Baa3 Caa1 Aa3 200 750 75 7.50% 15.75% 5.63% 3.00% 11.25% 1.13% A1 Aaa 90 5.85% 4.50% 1.35% 0.00% B2 550 12.75% 8.25% Caa3 Ba1 1000 250 19.50% 8.25% 15.00% 3.75% WR 1000 19.50% 15.00% A1 B1 Aaa Aaa Aaa A2 90 450 0 105 5.85% 11.25% 4.50% 4.50% 4.50% 6.08% 1.35% 6.75% 0.00% 0.00% 0.00% 1.58% Ba1 250 8.25% 3.75% 91 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) Central and South America Asia Eastern Europe & Hungary Russia Iceland Western Europe India Asia Indonesia Asia Ireland [1] Western Europe Isle of Man Financial Center Israel Middle East Italy [1] Western Europe Jamaica Caribbean Japan Asia Jordan Middle East Eastern Europe & Kazakhstan Russia Korea Asia Kuwait Middle East Eastern Europe & Latvia Russia Lebanon Middle East Eastern Europe & Lithuania Russia Luxembourg [1] Financial Center Macao Asia Malaysia Asia Malta [1] Western Europe Mauritius Africa Central and South Mexico America Eastern Europe & Moldova Russia Mongolia Asia Eastern Europe & Montenegro Russia Morocco Africa Netherlands [1] Western Europe Australia & New New Zealand Zealand Central and South Nicaragua America Norway Western Europe Oman Middle East Pakistan Asia Central and South Panama America Papua New Guinea Asia Honduras Hong Kong B2 Aa2 550 60 12.75% 5.40% 8.25% 0.90% Baa1 Baa3 Ba2 Ba2 Aa1 Aaa A1 Aa2 Caa1 Aa2 Baa3 160 200 300 300 30 90 60 750 60 200 6.90% 7.50% 9.00% 9.00% 4.95% 4.50% 5.85% 5.40% 15.75% 5.40% 7.50% 2.40% 3.00% 4.50% 4.50% 0.45% 0.00% 1.35% 0.90% 11.25% 0.90% 3.00% Baa2 A2 Aa2 180 105 60 7.20% 6.08% 5.40% 2.70% 1.58% 0.90% Baa3 B2 200 550 7.50% 12.75% 3.00% 8.25% Baa1 Aaa Aa3 A3 A1 Baa2 160 75 120 90 180 6.90% 4.50% 5.63% 6.30% 5.85% 7.20% 2.40% 0.00% 1.13% 1.80% 1.35% 2.70% Baa1 160 6.90% 2.40% Caa1 B1 750 450 15.75% 11.25% 11.25% 6.75% Ba3 Ba1 Aaa 350 250 9.75% 8.25% 4.50% 5.25% 3.75% 0.00% Aaa 4.50% 0.00% B3 Aaa A2 B3 650 105 650 14.25% 4.50% 6.08% 14.25% 9.75% 0.00% 1.58% 9.75% Ba1 B1 250 450 8.25% 11.25% 3.75% 6.75% 92 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) Paraguay Peru Philippines Poland Portugal [1] Qatar Romania Russia Saudi Arabia Singapore Slovakia Slovenia [1] South Africa Spain [1] St Vincent & the Grenadines Suriname Sweden Switzerland Taiwan Thailand Trinidad and Tobago Tunisia Turkey Turkmenistan Ukraine United Arab Emirates United Kingdom United States of America Uruguay Venezuela Vietnam Central and South America Central and South America Asia Eastern Europe & Russia Western Europe Middle East Eastern Europe & Russia Eastern Europe & Russia Middle East Asia Eastern Europe & Russia Eastern Europe & Russia Africa Western Europe B3 650 14.25% 9.75% Baa3 Ba3 200 350 7.50% 9.75% 3.00% 5.25% A2 Aa2 Aa2 105 60 60 6.08% 5.40% 5.40% 1.58% 0.90% 0.90% Baa3 200 7.50% 3.00% Baa1 A1 Aaa 160 90 6.90% 5.85% 4.50% 2.40% 1.35% 0.00% A1 90 5.85% 1.35% Aa2 A3 Aaa 60 120 5.40% 6.30% 4.50% 0.90% 1.80% 0.00% Caribbean Caribbean Western Europe Western Europe Asia Asia B1 Ba3 Aaa Aaa Aa3 Baa1 450 350 0 75 160 11.25% 9.75% 4.50% 4.50% 5.63% 6.90% 6.75% 5.25% 0.00% 0.00% 1.13% 2.40% Caribbean Africa Asia Eastern Europe & Russia Eastern Europe & Russia Baa1 Baa2 Ba3 160 180 350 6.90% 7.20% 9.75% 2.40% 2.70% 5.25% B2 550 12.75% 8.25% B2 550 12.75% 8.25% Middle East Western Europe Aa2 Aaa 60 5.40% 4.50% 0.90% 0.00% North America Central and South America Central and South America Asia Aaa 4.50% 0.00% Ba3 350 9.75% 5.25% B1 Ba3 450 350 11.25% 9.75% 6.75% 5.25% Aswath Damodaran, pages.stern.nyu.edu 93 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) Appendix 2: Asia banking sector peer comparison Source: Reuters Industry Report Banks - Asia Report - Altman Z-Score1 - Last updated on 2010 Current Total Common Shares Outstanding Market Capitalization USD (m) P/E Normalized, LFY P/B, LFY 15,573.50 11,791.62 17.60 1.73 253,839.16 149,317.16 18.48 2.41 CHN 253,828.16 109,391.38 13.29 1.78 CHN 233,689.08 195,110.44 18.81 3.18 CHN 334,018.84 231,585.11 19.53 2.94 CHN 334,018.50 214,640.66 18.04 2.73 CHN 18,823.00 15,111.15 15.00 2.06 CHN 2,293.41 6,346.96 15.51 3.34 CHN 48,994.38 52,276.89 17.08 2.79 CHN 48,994.38 53,855.63 18.17 2.78 CHN 14,707.17 45,403.10 20.40 4.57 CHN 39,033.34 29,398.93 22.62 2.39 CHN Shanghai Pudong 12 Development Bank Co Ltd 5,661.35 16,874.14 21.02 4.09 CHN 13 Bank of Beijing Co., Ltd 6,227.56 12,198.79 21.35 3.13 CHN 14 Hua Xia Bank Co., Limited 4,200.00 5,443.88 9.21 2.86 CHN 15 Industrial Bank Co., Ltd 5,000.00 18,282.00 14.35 3.22 CHN 16 Bank of Nanjing Co., Ltd 1,836.75 3,016.12 22.72 2.08 CHN 17 Bank of Ningbo Co., Ltd Dah Sing Financial 18 Holdings Ltd 2,500.00 4,087.00 26.05 3.49 CHN 250.09 2,002.72 8.46 1.49 HKG Company AVERAGE Bank of China Limited Bank of China China Construction Bank Corporation Industrial and Commercial Bank of China Industrial and Commercial Bank of China China Minsheng Banking Corporation Ltd Shenzhen Development Bank Co., Ltd Bank of Communications Co Ltd Bank of Communications Co., Ltd China Merchants Bank Co., 10 Ltd China CITIC Bank 11 Corporation Limited 94 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) Country of Domicile (ISO3), Code 19 Chong Hing Bank Limited Fubon Bank (Hong Kong) 20 Limited Industrial & Comm'l Bank 21 of China (Asia) BOC Hong Kong 22 (Holdings) Ltd The Bank of East Asia 23 Limited Dah Sing Banking Group 24 Limited 25 Wing Hang Bank, Limited China CITIC Bank 26 Corporation Limited 27 Hang Seng Bank China Construction Bank 28 Corporation China Merchants Bank Co., 29 Ltd CITIC International 30 Financial Holdings 31 Wing Lung Bank Limited PT Bank Victoria 32 International Tbk 33 PT Bank Bukopin Tbk PT Bank Himpunan 34 Saudara 1906 Tbk PT Bank Tabungan 35 Pensiunan Nasional Tbk 36 PT Bank Mega Tbk PT Bank Artha Graha 37 Internasional Tbk PT Bank Danamon 38 Indonesia Tbk PT Bank Mandiri (Persero) 39 Tbk 435 1,040.87 9.90 1.29 HKG 1,172.16 856.75 13.58 1.62 HKG 1,225.95 3,238.44 13.72 1.68 HKG 10,572.78 27,521.98 14.76 2.31 HKG 1,574.37 8,004.67 14.77 2.07 HKG 931.42 1,667.34 15.47 1.41 HKG 294.96 3,793.72 16.41 2.82 HKG 39,033.34 21,327.95 16.42 1.74 HKG 1,911.84 38,122.12 16.60 5.27 HKG 233,689.08 175,047.14 16.88 2.85 HKG 14,705.06 42,249.23 18.99 4.26 HKG 5,757.32 4,178.61 20.29 1.23 HKG 232.19 4,561.39 27.75 2.85 HKG 2,335.00 27.13 5.36 0.62 IDN 5,712.34 248.09 6.07 1.16 IDN 1,500.00 21.17 6.17 1.08 IDN 943.94 245.98 6.70 1.84 IDN 1,625.44 423.57 7.49 1.33 IDN 5,880.05 38.31 10.52 0.59 IDN 5,044.56 2,656.47 11.74 2.25 IDN 20,749.55 5,913.96 12.60 1.86 IDN 40 PT Bank Permata Tbk PT Bank Rakyat Indonesia 41 (Persero) Tbk 7,743.13 731.44 13.50 1.73 IDN 12,317.80 7,222.16 13.67 3.42 IDN 42 PT Bank Central Asia Tbk 24,479.77 6,977.13 14.40 3.15 IDN 2,310.00 32.61 14.44 0.81 IDN 43 PT Bank Bumi Arta Tbk 95 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) 44 PT Bank Lippo Tbk PT Bank Nusantara 45 Parahyangan Tbk 3,915.73 1,190.45 14.86 2.83 IDN 316.55 51.9 15.01 1.53 IDN 46 PT Bank Niaga Tbk PT Bank Ekonomi Raharja 47 Tbk 12,451.76 1,216.79 15.44 2.13 IDN 2,670.00 417.46 16.66 3.08 IDN 48 PT Bank Swadesi Tbk PT Bank Bumiputera 49 Indonesia Tbk PT Bank Capital Indonesia 50 Tbk 310 16.23 17.61 1.20 IDN 5,000.00 41.26 18.05 0.71 IDN 1,510.88 12.47 18.91 0.63 IDN 6,653.36 866.89 19.00 2.24 IDN 15,250.36 2,003.58 19.02 1.07 IDN 5,814.57 561.89 19.65 1.54 IDN 20,238.77 1,779.96 20.55 2.18 IDN 2,742.25 44.36 22.93 1.19 IDN 501.22 32.65 48.05 2.27 IDN 28,350.15 240.1 52.11 1.91 IDN 48,877.15 2,520.81 57.40 4.33 IDN 813.75 5.48 70.72 0.43 IDN 2,576.53 442.01 99.91 4.32 IDN 2,349.06 59.94 120.28 2.24 IDN 446.7 566.95 2.51 0.45 IND 63 Syndicate Bank Ltd 521.97 578.09 2.95 0.58 IND 64 Dena Bank 286.82 269.3 3.03 0.65 IND 544.8 941.87 3.39 0.84 IND 320.94 3.60 - IND 67 Oriental Bank of Commerce 250.54 720.46 3.71 0.54 IND 68 Vijaya Bank 433.52 325.43 3.90 - IND 51 PT Bank UOB Buana Tbk PT Bank Negara Indonesia 52 (Persero) Tbk 53 PT Bank NISP Tbk 54 PT Bank Pan Indonesia Tbk PT Bank Windu Kentjana 55 International Tbk 56 PT Bank Kesawan Tbk 57 PT Bank Century Tbk PT Bank Internasional 58 Indonesia Tbk PT Bank Eksekutif 59 Internasional Tbk PT Bank Mayapada 60 Internasional Tbk 61 PT Bank Agroniaga Tbk 62 Allahabad Bank 65 Indian Overseas Bank 66 State Bank Of Travancore 96 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) 69 Canara Bank 410 1,650.13 3.94 0.67 IND 70 Indian Bank 429.77 871.06 4.06 0.77 IND 71 Central Bank Of India 404.14 520.87 4.09 - IND 72 Union Bank of India 505.12 1,311.94 4.10 0.77 IND 485 571.31 4.24 0.76 IND 74 Bank of Maharashtra State Bank of Bikaner and 75 Jaipur 430.52 334.61 4.39 0.81 IND 344.88 4.70 0.87 IND 76 Bank of Baroda 364.27 1,774.01 4.96 0.68 IND 77 Corporation Bank 143.44 871.67 5.03 - IND 78 South Indian Bank Limited 70.41 155.54 5.04 - IND 79 Punjab National Bank 315.3 2,793.63 5.63 - IND 80 Bank of India 525.18 2,728.07 5.65 1.11 IND 81 The Federal Bank Limited 170.94 726.87 5.81 - IND 82 IDBI Bank Limited 724.76 1,054.63 6.12 0.50 IND 83 Karnataka Bank Limited 121.34 351.88 6.33 1.10 IND 320 168.52 6.40 - IND 85 State Bank of India 631.56 16,068.68 6.50 1.14 IND 86 UCO Bank Limited Jammu & Kashmir Bank 87 Limited 799.36 506.81 6.61 0.75 IND 48.48 559.85 6.73 - IND 53.94 348.11 7.24 - IND 32.06 50.05 7.61 - IND 3.6 582.99 7.92 1.83 IND 91 Bank of Rajasthan Limited 134.46 211.96 7.96 - IND 92 ING Vysya Bank Limited 102.83 464.2 11.32 1.30 IND 93 Lakshmi Vilas Bank Ltd 48.79 83.39 14.29 - IND 73 Andhra Bank 84 City Union Bank Limited 88 Karur Vysya Bank Limited The Dhanalakshmi Bank 89 Limited 90 State Bank of Mysore 97 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) Kotak Mahindra Bank 94 Limited 344.83 3,418.39 14.71 2.51 IND 95 Yes Bank Limited 296.09 711.94 15.42 - IND 1,112.98 14,751.89 17.53 1.43 IND 97 Axis Bank Ltd 358.57 4,801.43 18.73 2.37 IND 98 HDFC Bank Limited 424.62 9,648.64 21.51 3.02 IND 319.81 391.5 22.55 - IND 174.3 189.01 25.38 1.28 IND 1,985.19 1,898.30 57.05 4.65 IND 1,112.69 - - - IND 344.83 - - - IND 315.3 - - - IND 52.6 37.57 1.43 0.28 PHL 962.84 301.55 4.17 0.48 PHL 329.35 390.87 6.46 1.41 PHL 641.42 444.06 6.62 0.74 PHL 104.01 19.43 6.87 0.59 PHL 1,807.27 1,251.19 8.08 0.81 PHL 240.25 253.45 9.52 1.47 PHL 2,704.69 2,437.20 11.09 1.58 PHL 77.08 931.74 11.51 1.59 PHL 662.25 392.98 11.71 0.59 PHL 2,302.02 1,998.46 12.92 1.52 PHL 500 686.81 24.49 3.70 PHL 247.97 168.95 67.50 1.55 PHL 72.77 39.98 211.04 2.39 PHL 96 ICICI Bank Limited 99 IndusInd Bank Limited Development Credit Bank 100 Limited Centurion Bank of Punjab 101 Limited ICICI Bank Limited 102 (Parent) Kotak Mahindra Bank 103 Limited (Parent) Punjab National Bank 104 (Parent) Philippine Bank Of 105 Communications RCBC-Rizal Commercial 106 Banking Corp 107 Security Bank Corporation UnionBank of the 108 Philippines AsiaTrust Development 109 Bank, Inc Metropolitan Bank & Trust 110 Company 111 Philippine Savings Bank Bank of the Philippine 112 Islands 113 China Banking Corporation 114 Philippine National Bank Banco de Oro Universal 115 Bank 116 Philippine Trust Company Chinatrust (Phils.) 117 Commercial Bank Corp 118 Citystate Savings Bank, Inc 98 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) 119 Allied Banking Corporation Export and Industry Bank, 120 Inc 121 Forum Pacific Inc Oversea-Chinese Banking 122 Corp Limited 0.45 - - - PHL 18,937.81 784.75 112.38 - - 0.78 - PHL PHL 3,091.17 18,326.10 12.32 1.69 SGP 123 DBS Group Holdings Ltd 1,513.72 20,724.87 13.00 1.38 SGP 124 United Overseas Bank Ltd 1,505.49 20,545.92 13.67 1.72 SGP 125 Thanachart Capital PCL Kiatnakin Bank Public 126 Company Limited Bangkok First Investment 127 and Trust PCL ACL Bank Public Company 128 Limited TISCO Bank Public 129 Company Limited 1,333.14 531.34 7.10 0.68 THA 521.78 389.34 8.51 0.70 THA 200 31.77 8.83 0.34 THA 1,087.18 127.06 9.09 0.60 THA 544.62 310.09 9.45 0.98 THA 130 KASIKORNBANK PCL 2,393.26 4,769.31 10.64 1.59 THA 131 Bangkok Bank PCL 1,908.84 6,463.87 11.81 1.30 THA 11,179.75 2,730.45 14.19 0.95 THA 1,900.61 4,186.24 14.66 1.46 THA 5,762.54 3,609.14 - 1.54 THA 6,674.70 332.04 - 5.19 THA 2,112.81 886.41 - 0.81 THA 41,536.74 1,443.89 - 1.96 THA 138 Taiwan Business Bank Taichung Commercial Bank 139 Co , Ltd 3,873.60 1,529.63 7.39 1.16 TWN 1,304.09 549.3 7.83 1.05 TWN 140 Taiwan Cooperative Bank 4,770.00 4,183.18 12.60 1.24 TWN 503.42 229.44 18.73 0.67 TWN 10,754.17 3,963.56 20.82 0.85 TWN 6,983.44 1,038.13 2,987.47 311.22 23.03 1.05 TWN TWN 132 Krung Thai Bank PCL Siam Commercial Bank 133 PCL Bank of Ayudhya Public 134 Company Limited BankThai Public Company 135 Limited Siam City Bank Public 136 Company Limited 137 TMB Bank PCL 141 Bank of Kaohsiung, Ltd China Development 142 Financial Holding Corp Sinopac Financial Holdings 143 Company Ltd 144 King's Town Bank 99 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com) 27.55 0.84 Chang Hwa Commercial 145 Bank, Ltd 4,809.48 3,196.98 34.52 1.43 TWN 146 Cosmos Bank, Taiwan 6,786.65 491.33 - 0.95 TWN 147 EnTie Commercial Bank Far Eastern International 148 Bank First Capital Commercial 149 Bank 3,359.89 698.77 - 1.49 TWN 1,879.78 603.12 - 0.97 TWN 210 82.24 - 0.58 TWN 150 Ta Chong Bank Ltd 2,720.30 830.72 - 1.14 TWN 151 Union Bank of Taiwan 1,918.82 410.43 - 0.86 TWN 100 Create PDF files without this message by purchasing novaPDF printer (http://www.novapdf.com)