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European banks' price-to-book ratios

Sweden's big four banks have all attracted market valuations far above their book values, while Barclays Plc, Deutsche Bank AG and Commerzbank AG are all among those valued at less than half the sum of their parts, according to S&P Global Market Intelligence data.

In a study published Sept. 4, consultancy Bain & Co. said a cohort of banks performing well in terms of both asset quality and profitability were commanding an average price-to-book ratio of 1.31x. Those falling short on both sides had an average price-to-book ratio of 0.31x, while those doing well on asset quality alone commanded 0.72x and those struggling in terms of profitability and efficiency were valued at 0.60x book.

Bain said banks from Scandinavia, Belgium and the Netherlands did particularly well in its 111-lender survey, a statement borne out Swedbank AB (publ) (1.92x book, according to S&P Global Market Intelligence figures) and fellow Swedish giants Svenska Handelsbanken AB (publ) (1.69x), Skandinaviska Enskilda Banken AB (1.59x) and Nordea Bank AB (publ) (1.43x). Belgium's KBC Group NV was trading at 1.57x book value, Copenhagen-based Danske Bank A/S at 1.33x, Norway's DNB ASA at 1.20x and Dutch giant ING Groep NV at 1.14x.

The highest-concern quadrant of Bain's study, those struggling on both measures, comprised mostly banks from Italy, Greece, Portugal and Spain, it said. Those who fell short in terms of profitability and efficiency included a significant number of U.K. and German banks, the consultancy noted, describing some as "names that used to be references for good health."

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