Module II· Multiples & Sector SpecificsBasic
Question
Which multiples do you use for banks, insurers and REITs?
Answer
Banks
P/B (price-to-book) or P/TBV (tangible book value).
- Logic: equity × ROE-to-CoE premium (rule of thumb).
- Range: 0.8–1.5x P/B; premium banks (UBS, JPMorgan) >1.5x.
Insurers
- Life: embedded-value multiple.
- P&C: P/B.
- Large listed insurers: 1.2–1.5x.
REITs
- NAV discount/premium, P/AFFO, cap rate (NOI/property value).
- Large listed residential REITs: 0.7–1.1x NAV.
Pitch tip
'For financials and real estate, EBITDA multiples are not informative — sector convention is P/B for banks, P/AFFO for REITs.'