Price-to-book ratio for bank shares on UZSE

Many of the shares listed on the Tashkent Stock Exchange (UZSE) are banks, and banks are among the hardest to value with the tools that work for factories and shops. A bank's revenue is mostly interest, its raw material is other people's money, and its debt is part of the business rather than a way of financing it. That is why analysts reach first for a different ratio when they look at banks: price to book, or P/B. This guide explains how the ratio works, how to calculate it, why it has to be read together with return on equity, and what is different about Uzbek bank reports.

What P/B measures

Book value is the shareholders' equity on the balance sheet: what would be left for owners if all assets were sold at the values in the accounts and all liabilities were paid. The ratio compares the market's price with that figure:

• P/B = share price ÷ book value per share, or equivalently
• P/B = market capitalisation ÷ shareholders' equity

A P/B of 1 means the market values the bank at exactly its book equity. Above 1, investors pay a premium, usually because they expect the bank to earn good returns on that equity. Below 1, they pay less than book, often because they doubt the returns or the true value of the assets.

Why P/B suits banks

For an industrial company, book value is a weak guide: a plant bought twenty years ago may be carried at a fraction of what it would cost today, and brands and know-how are not on the balance sheet at all. A bank is different. Most of its assets are loans, securities and cash, which are financial amounts recorded close to what the bank expects to receive, after provisions for bad loans. Its equity is also what regulators watch, because it is the buffer that absorbs losses before depositors are hurt. So for banks, book value is both more meaningful and more closely supervised.

How bank reports differ in Uzbekistan

Banks do not use the NSBU balance sheet (Form 1) and report on financial results (Form 2) that most companies file. The regulation that sets those forms since 1 January 2025 excludes commercial banks, insurers and budget organisations (lex.uz, registration No. 3567, as of 26 September 2026). On openinfo.uz, a bank's balance sheet starts with lines such as cash and amounts due from the Central Bank, and its income statement starts with interest income.

The Law on banks and banking activity sets the rules that matter to an investor, as of 26 September 2026 (lex.uz):

• Banks publish financial reports in the form set by the Central Bank, after an audit organisation confirms the information in them (Article 72).
• Banks must disclose information on their own funds, compliance with capital requirements, liquidity, the size of their risks and other key prudential ratios (Article 72).
• Annual financial statements of banks are subject to mandatory audit, and the audit checks compliance with accounting legislation and International Financial Reporting Standards (Article 74).

In practice, the equity figure you use for P/B should come from the latest audited annual statements, and the capital disclosures tell you how much of that equity counts as a loss-absorbing buffer.

A worked example

Two hypothetical banks, with round numbers that are illustrative only:

Bank A

• Shareholders' equity: 2,000 billion soʻm
• Common shares outstanding: 1 billion
• Share price: 3,000 soʻm, so market capitalisation is 3,000 billion soʻm
• Net profit for the year: 400 billion soʻm

Book value per share is 2,000 soʻm, so P/B = 3,000 ÷ 2,000 = 1.5. ROE is 400 ÷ 2,000 = 20%.

Bank B

• Shareholders' equity: 2,000 billion soʻm
• Common shares outstanding: 1 billion
• Share price: 1,200 soʻm, so market capitalisation is 1,200 billion soʻm
• Net profit for the year: 160 billion soʻm

P/B = 1,200 ÷ 2,000 = 0.6. ROE is 160 ÷ 2,000 = 8%.

Bank B looks far cheaper on P/B. But look at P/E, which equals P/B divided by ROE: for Bank A, 1.5 ÷ 0.20 = 7.5; for Bank B, 0.6 ÷ 0.08 = 7.5. Relative to what each bank earns, the market prices them the same. Bank B's low P/B simply reflects its low return on equity. The lesson: a low P/B is only a bargain if the bank's returns are likely to improve, or if its book value is more solid than the market believes.

P/B and ROE belong together

A useful rule of thumb follows from the example. A bank that can earn a return on equity above what shareholders require for the risk tends to trade above book. A bank earning less than that tends to trade below book. So when you compare banks, plot them side by side on P/B and ROE rather than ranking them on P/B alone. Our guide to ROE and ROA explains why a bank's ROA is naturally low and its ROE is the figure to watch.

Traps specific to bank shares

• Loan quality. Book value is only as good as the loans behind it. If problem loans are under-provisioned, equity is overstated and the real P/B is higher than it looks. Watch for large jumps in provisions and read the auditor's opinion.
• Preferred shares. Many UZSE banks have both common and preferred shares. When you calculate book value per common share, subtract the part of equity that belongs to preferred holders, for example their nominal value or the amount the charter sets, before dividing by the number of common shares.
• Share classes and prices. Use the price and share count of the same class. A preferred share often trades at a different price from the common share of the same bank.
• Capital raising. Banks may issue new shares, for example to strengthen their capital. New shares issued below book value dilute book value per share for existing holders, and those issued above it raise it.
• Dates. Equity is reported once a year in audited form, while the price changes every day. Always note the date of the price and the fiscal year of the equity you are comparing.
• Liquidity. Some bank shares trade rarely. A price from a small or old trade may not reflect what you could buy or sell at today.

Where Finmind helps

On the public stocks pages, each UZSE bank share, for example Hamkorbank (HMKB) or Oʻzsanoatqurilishbank (SQBN), shows P/B, P/E and ROE among the key figures when the underlying figures are on record. The page notes that P/E and P/B use the close of a stated date and the latest reported annual figures, and P/B is left blank when equity is zero or negative. The share class is named on each page, and another class of the same bank, where one exists, is linked. For how P/E relates to profit and dividends, see our guide to the P/E ratio and dividend yield.

This article is for education only and is not investment advice. Investing in securities involves risk, including the loss of money you invest.