Security Valuations
Saudi bank
The bank held privately held securities in its portfolio for which no external rating and no observable market price existed, and required annual fair market valuations for reporting and risk purposes.
Scope of work
Multiple methods applied, singly or in combination according to the asset:
- Discounted cash flow, for holdings with projectable cash flows
- Relative valuation, against comparable listed companies and precedent transactions
- Net asset value, where the underlying holdings drive value
Liquidity adjustment applied against the listed comparables used in the valuation, so the comparison reflects what a buyer would actually pay for an unlisted holding.
Sensitivity analysis run around each central estimate, with differences between methods examined and explained rather than averaged into a single figure.
Documentation of methodology and assumptions alongside each valuation, to a standard that supports audit and regulatory review.
Outcome and value
- A fair market valuation for each holding on an annual cycle.
- A defensible basis the bank's finance and risk teams can use directly.
- Comparability year on year, through the same methodology carried forward.