Which multiple is NOT used for traditional valuations of banks?

The correct choice indicates that EV/Revenue is not typically used for traditional valuations of banks. This is largely due to the unique operating structure and regulatory environment of banks, which differ significantly from other industries.

For financial institutions like banks, the most pertinent valuation metrics often revolve around their earnings and asset values rather than traditional revenue comparisons. The P/E ratio (price-to-earnings) is widely used because it provides insight into how much investors are willing to pay for each dollar of earnings, which is a critical indicator of a bank's profit generation capacity.

Similarly, the P/BV ratio (price-to-book value) is highly relevant for banks since it reflects the market's valuation relative to the book value of the bank's equity. This ratio is especially useful as banks have significant tangible assets on their balance sheets, such as loans and securities, which can be easily appraised.

The EV/EBITDA multiple is more common in valuing companies in asset-heavy industries, and while less frequently used than P/E or P/BV for banks, it can still have relevance in certain contexts, particularly when assessing the operational performance of banking institutions.

Conversely, EV/Revenue is less applicable in banking due to the nature of financial services, where revenues do