Performance evaluation & stock valuation of Prime Bank Ltd.

Abstract

This paper has been prepared in order to present an evaluation of financial performances as well as the stock valuation of Prime Bank Ltd. The paper opens with a short overview of Prime Bank followed by my internship experience. The subsequent report covers the evaluation of financial performance through some ratio analysis (i.e., return on equity, return on asset, net interest margin, earning per share, net bank operating margin) and valuation of stock of the company (i.e. the determination of the current market rate of interest, risk free rate, respective beta value of the company, etc.). The analysis of profitability includes determination of the growth rate, required rate of return and the intrinsic value. Finally, the comparison of the intrinsic value with the market price has been made to evaluate whether the common stocks are overpriced or underpriced, along with the possible reasons for its being so. In conclusion, the paper evaluates the reasons for over or undervaluation of the common stock of the Prime Bank Ltd.