Latest News:  
Beijing   Overcast/Shower    29 / 21 ℃  City Forecast

English>>China Business

China's bank stay at top of global banks

(China Daily)

12:04, August 18, 2012

China's biggest banks still dominate the world's top 10 in terms of market capitalization and are among the most profitable globally, according to a report by Boston Consulting Group.

But their falling valuation multiples suggest declining investor confidence in their future profitability.

Driven by rapid growth in credit spreads, China's big four banks all made it to the list of the world's top banks, with Industrial and Commercial Bank of China maintaining the top spot, while China Construction Bank, Agricultural Bank of China and Bank of China took the third, sixth, seventh positions.

Four US banks also made it into the top 10 list.

China's banks are among the most profitable, with an average of 22 percent after-tax return on equity (ROE), second only to that in Indonesia, where ROE was 26 percent.

However, Boston Consulting suggested that the high profitability of China's banks was unlikely to be sustainable, evidenced by falling price to book values and price-earning ratios.

The price to book ratio — a key indicator of whether a public company is undervalued or overvalued — of Chinese banks fell from the record high of nearly five in 2007, to just above one.

By contrast, banks in Indonesia, Mexico and India, registered a similar ROE-COE (cost of equity) level as China's, but enjoyed a much higher price to book ratio.

News we recommend:
Has the bear outstayed his welcome? Steel profits continue to suffer China has entered an era of low consumer prices
Firms should watch out for Internet threats China's property market to cool down: experts Why have people lost trust in data and indices?
A ruling in Europe gives cheer to China  Online retailers declare cut-throat price war Zones to boost DPRK trade

【1】 【2】 【3】


Leave your comment0 comments

  1. Name


Selections for you

  1. APF detachment conducts drill

  2. Eyes on DPRK

  3. Motorola layoffs spark protest

  4. 140 puppets exhibited in Macao

  5. Cute baby bear

  6. Sexy bikini special forces

Most Popular


  1. Be wary of West powers' attemp on Syria
  2. History proves Diaoyu Islands are China's territory
  3. Nation’s strength backs Diaoyu progress
  4. China, Kyrgyzstan pledge closer cooperation
  5. Who are tomorrow's consumers?
  6. Syrian neighbors different as crisis deepens
  7. Arms sales add fuel to regional security dilemma
  8. China's firms bigger but not necessarily better
  9. Japan should avoid making rash moves amid anxiety
  10. Consumers lose out in price war

What's happening in China

Typhoon Kai-Tak brings storms, gales to coastal cities of S China

  1. Ghostwriters doing homework
  2. Security guard for every school by 2013
  3. Coastal city builds 6-bln-yuan undersea tunnel
  4. Guangzhou to host sex-themed festival in October
  5. At least 18 trapped in Shaanxi mine

China Features

  1. Is China's low-cost era approaching its end?
  2. Chinese firms provided one-stop services in U.S.
  3. Don't store bread and biscuits together
  4. Eat ducks during Chushu (Stopping the heat)
  5. Special athletes at London 2012 Olympic Games

PD Online Data

  1. Spring Festival
  2. Chinese ethnic odyssey
  3. Yangge in Shaanxi
  4. Gaoqiao in Northern China
  5. The drum dance in Ansai