Valuing financial institutions and assets requires an in-depth understanding of the industry and the regulatory environment. Our experienced consultants and CFA charterholders apply their knowledge of the finance and banking industry to assist clients with financial modelling, valuation, and economic damages assessments. We have experience determining the economic impact of monetary policy changes, exogenous shocks like the Global Financial Crisis and COVID-19 pandemic, and regional economic trends on the value of financial assets and institutions. Our team has worked on a wide range of cases involving project finance loans, government bailouts of commercial banks, commercial bank loans, and multi-billion-dollar public pension funds.
Our due diligence begins with understanding the macroeconomic conditions in the relevant region and then assessing how these conditions will impact the financial institution at issue. We also analyze the specific business characteristics of the financial institution that may be sensitive to changes in macroeconomic conditions, such as the firm’s debt structure and its financial leverage. For example, the valuation of financial assets is often sensitive to changes in interest rates. Thus, we may analyze the monetary policy in the relevant country and then incorporate the central bank’s expectations into a forward-looking valuation. We also perform liquidity and solvency analyses at the firm level to understand the sensitivity of the financial institution’s assets relative to its liabilities. Understanding these key value drivers, like the effects of changes in interest rates on balance sheet items, allows us to fully integrate the potential risks to financial assets returns and assess the viability of the financial institution under various conditions.