### Is it Time to Buy the Banks? (1)

August 28, 2008
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RELATED TICKERS: WFC
, C
, KBE

You can read my article, 'Is it Time to Buy the Banks' here. As promised, here are the assumptions I used in calculating the justified P/BV multiple for the KBW Bank Index:

**CALCULATING A JUSTIFIED P/BV MULTIPLE FOR THE KBW BANK INDEX (Part I)**

**ROE** = 10.216% [Calculated as a weighted average of the ROEs of the index components]

**Earnings growth** : 8.34% [Historical 3-year growth rate. I selected the historical growth figure because it lay almost squarely in the middle of a published 3-5 year future earnings growth rate for the index (8.44%[1]) and the weighted average growth rate across all index components (8.27%).]