Why Price-to-Book valuation for Finance companies?

[amitayu]

REPCO home finance

I think that P/B does not tell much for financial companies and whatever it tells can be misleading. I am borrowing from my earlier post in CanFin Homes discussion board. Please correct me where you feel that I am wrong and feel free to give your inputs. Let me explain: RoE = Earning / BV of Equity PE = Price / Earning PB = Price / BV of Equity So, PB = PE * RoE Even at the same RoE, Price to Book can rise to a much higher value if PE ratio goes up. I find much easier to interpret PE rati…