Interest rates are rising and it’s good for banks.

The price to Book (P/B) ratio is a measurement of the company valuation while Return on Equity (ROE) is a measurement of company efficiency. By comparing companies in the same industries using these 2 indicators, we can identify companies that are being managed efficiently while trading at a low valuation. This chart serves as a tool for us to identify companies that we could pick in the industry.

Banks that delivered higher and average ROE while still trading at lower than average P/B ratio are Hong Leong Financial Group, RHB Bank, Alliance Bank, and Ambank as of 8 Aug 2022.

You can check out the daily updated chart here: https://www.isquareintelligence.com/insights/Malaysia-Banks-PB-vs-ROE

Source:iSquare