Considering predicted M&A activities in banking sector, bank valuation is one of the most actual issues on the agenda. Some valuation specialists consider that a valuation of a financial institution can be undertaken mainly using Discounted Cash Flow approach. However, we face some difficulties while using this method for valuation of Latvian commercial banks. The goal of the research is to develop a mathematical model as an alternative to existing company’s valuation models. The factors affecting bank value are represented by financial ratios that were selected, using correlation analysis. The real value of a bank estimated based on average P/B ratio for CEE banks.