Find which bank price is riskier as per P/E ratio (based on Q4 report)

ShareSansar August  24:

The P/E ratio signifies the market’s willingness to pay for the company’s earnings. The higher the P/E the more the market is willing to pay for the company’s earnings. The investors take the P/E ratio as a tool to measure the price of companies’ stock. Higher the P/E higher will be risk and lower the P/E lower will be the risk.

The 4th quarterly report of all the 30 commercial banks has already been published.  29 commercial banks are listed in NEPSE whereas Rastriya Banijya Bank (RBB) has not yet floated its IPO to the general public.

Out of all commercial banks Agriculture Development Bank Limited (ADBL)has the lowest P/E ratio. In the fourth quarter report of last fiscal year the bank has mentioned its P/E ratio to be at 9.93 times where as at present its P/E ratio has reached 11.63 times  and its last traded price as of August 23 stands at Rs 506.

As per the Q4 report ADBL, PRVU,  NBB, NIBL and CZBIL were the banks with the lowest P/E ratio and the average P/E ratio of all the commercial banks stands at 24.52 times. The P/E ratio of 14 commercial banks was below the average level.

As per the prices of the 23 August ADBL, PRVU, NBB, LUBL and SBL  are the banks with lower P/E ratios.

As of 23rd August the average P/E ratio of all the commercial banks stands at 31.44 times. There are 14 banks below the average level.

Note that the average P/E ratios of all the commercial banks was more than 60 times when NEPSE index hit all time high in the year 2065 B.S.

Find out which bank price is riskier as per P/E ratio.