This Travillian Next article examines why certain banks consistently trade at the highest valuation premiums. Key findings reveal that these banks tend to be long-established, often founded over a century ago, and deeply entrenched in stable, slower-growth markets where they hold dominant deposit market shares. They typically have strong funding profiles supported by low-cost, sticky core deposits, maintain highly liquid balance sheets, and demonstrate consistent profitability through economic cycles. Unlike aggressive acquirers, most prefer smaller, bolt-on acquisitions that minimize risk. Additionally, these banks benefit from loyal, long-term institutional investors who tolerate premium valuations due to sustained strong performance. Together, these factors create a “secret sauce” of stability, quality lending, and efficient growth that investors reward with higher multiples.

For the full insights, read the full article on the Travillian Next website here.