G20 - Financial Institutions and Services: GeneralReturn

The aim of this contribution is the analysis of the fact whether the situation in connection with SARS-CoV-2 had a more fundamental effect on the risks and on the valuation process of commercial banks. A simple hypothesis was defined, that due to the very strong financial health of Czech commercial banks and their high stability, there should not be major negative changes to their valuation process. The basic methodological tools of this contribution are the analysis of the given state, the method of comparing the current state with new findings, as well as the final synthesis with relevant recommendations for the area of ​​valuation of commercial banks. The analysis carried out indeed showed that, despite a certain short-term decline in the performance of Czech commercial banks in the crisis year 2020, that Czech commercial banks dealt with the coronavirus crisis very well and the default rate did not increase significantly. It follows that the coronavirus crisis will not have any major impact on the valuation of commercial banks. It has been confirmed that the very good financial health of Czech commercial banks and the strict regulatory policy of the CNB increase the resilience of these institutions in the event of respective crises. Strengthening regulatory measures could only have a negative effect on the reduction of the value of commercial banks, especially in the case of the use of income methods.

The aim of this paper was to verify the accuracy of the determination of average indebtedness and branch standards in the previously mentioned branches and the analysis of the development of average indebtedness in these selected branches. The basic method used to fulfill this goal of the paper will be mainly the method of data analysis from the database of the University of Economics in Prague, Albertina, and the theoretical basis and practical conclusions from previous research. It was possible to propose a simple hypothesis that average indebtedness, and thus branch standards, will be confirmed only in certain branches. The stated hypothesis was only partially confirmed. It turns out that the established average level of indebtedness and thus branch standards in the past was quite relevant and these values were confirmed in most branches. When recommending possible volatility + (-) 5 %, the values of average indebtedness and the branch standards were stated of 50 % for branches Iron Production, Shoes Production, and Motor Vehicles, 40 % for branches Machines Production, Beverages Production and Electrical Equipment, and 35 % for the branch Pharmacy.

The aim of this paper was to assess the extent to which the formation of an emergency caused by SARS-CoV-2 in 2020 and in 2021 influences the income valuation. Impacts on income valuation may be neutral, negative or positive, depending on how the industry has been affected by SARS-CoV-2. In the event of a negative impact, there is a decrease in revenues compared to the planned values within the income valuation, and thus also a decrease in the value of the valued business entity. The intensity of this negative impact will be based on the entity's ability to cope with the effects of the crisis, or the relevant internal potential of the entity being valued, and whether the SARS-CoV-2 crisis has affected the first stage of valuation or ongoing value. The negative impact is manifested mainly in the strategic analysis and financial analysis. There are different developments in the market as a whole, but changes are also due to changing competitive positions. Despite the problems caused by the crisis, income valuation has its place and its information ability, while the analysis of the internal potential of the valued business entity in terms of its ability to face a possible crisis needs to be strengthened.

The aim of the paper is therefore to assess whether the proposed Czech Valuation Standards for Financial Institutions (CVSFI) are in line with the basic principles and procedures of the International Valuation Standards (IVS), which would increase their relevance, seriousness and explanatory power. For the purposes of fulfilling the goal of this paper, the methodology of IVS and ČOSFI analysis and their comparison with the subsequent synthesis of the acquired knowledge into the relevant conclusions will be used. This target was met and a brief analysis and subsequent comparison of the findings revealed that CVSFI fully complies with the concept and intentions of IVS and are fully compatible with them, both in terms of valuation purpose and used valuation methods, market comparison, property valuation and valuation of intangible and financial assets, which only confirms their adequacy and usability. The only area that still needs to be worked on is the strengthening of territorial influences in the Czech Republic and also the reflection of the influence of inflation in the selected areas.

The aim of this paper is to analyze the accuracy of the prognosis of the bank's interest incomes and bank's incomes from fees and commissions on the basis of the different shapes of the regression's functions. This approach is used if there are not internal banking information and it is necessary to prepare the financial plan for the income valuation purposes. The data source is four diploma thesis concerning the problems of bank valuation of the students of the Faculty of Finance and Accounting of the University of Economics in Prague uder the guidance of the co-author of this paper. Two regression functions were preprared in each thesis, the first for the interest incomes and the second for the incomes from fees and commissions. The accuracy of the estimations was compared to the real data. It was found out that in case of interest incomes the multiple regression analysis is more suitable that the regression based only on the development of GDP, and in case of incomes from fees and commissions the multiple regression based on the development of the number of inhabitants and the exchange rate of CZK/EUR is the best.

The aim of this paper is to analyze the accuracy of the estimation of the plan of net interest incomes and fees incomes of the bank calculated only by the estimation of the basis of the regression analysis with the dependent variable such as for example GDP, PRIBOR, the changes of the exchange rates etc. for the first and second year of the financial plan of the valuating commercial bank. This accuracy is stated as the percentage deviation from the real value stated in accounting statements of the valuing bank. The question is what accuracy can be acceptable. The valuation practice considered as the relatively good estimation the deviation of 10 % and as the maximum accepted deviation of 20 % from the reality. This deviation average has only the estimation of the net interest income for the first year of the plan. The accuracy of the estimation depends on the accuracy of selected valuations where three of them fulfill the accepted deviation of 20 %. The more accurate information can be obtained by the next researches if data for next years will be available.