Why would you not use a DCF for a bank or other financial institution?

Banks use debt differently than other companies and do not re-invest it in the business – they use it to create their “products” – loans – instead. Also, interest is a critical part of banks’ business models and changes in working capital can be much larger than a bank’s net income – so traditional measures of cash flow don’t tell you much.

For financial institutions, it’s more common to use a Dividend Discount Model or Residual Income Model instead of a DCF.