COuld it be worth more. Yes it could.

On a very very simplified basis, if the BV was 0.155 and the RoE was 10%, then one could make a case that it would trade at 1.55xBV, or 24 cents.

At this stage one would need to realise that the book value will alo begin growing each year.

So for the moment, I am saying that 15.5-24cents seems plausible. But this is very much dependent on profitability and adequate returns, both of which seem like a long way from here.

]]>I think the big take-away here though has to be that they need time to heal to work off the impairments and central banks will as much as possible pump in liquidity to make sure they don’t have any funding problems. Simply put the soverign backstop will keep them afloat. To me therefore the best place to invest has to be in the bank sub-debt and preference share markets where one can shelter from dilution to some extent.

]]>seeing that you purchased at 0.117 and currently trades around 0.13, and your statement that you are a buyer at 0.08 because of continued loan losses, are you selling?

regards

rijk