Economics
China Banks’ Golden Era Fades as Crunch Raises Default Risk
This article is for subscribers only.
Chinese banks’ valuations are close to their lowest on record as the nation’s interbank funding crisis exacerbated investors’ concern that earnings growth will stall and defaults may surge as the economy slows.
Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, ended Hong Kong trading last week at 5.3 times estimated earnings, data compiled by Bloomberg show. The Beijing-based bank may report profit of $41 billion for 2013, according to the average of 17 analysts’ estimates. Wells Fargo & Co., with net income forecast at $20 billion, trades at 11 times earnings.