Chinese Banks ‘Not as Cheap as They Look,’ Templeton Says
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Valuations of Chinese banks at near-record lows are not as “cheap as they look” because of an increase in non-performing loans and risks of write-offs, according to Templeton Equity Group’s Norman Boersma.
Shares of the nation’s largest state-controlled banks, known as the Big Four, have fallen 1.2 percent on average this year in Hong Kong, compared with a 0.6 percent decline for the benchmark Hang Seng Index. The lenders are trading at an average of 5.4 times trailing earnings as of yesterday compared with a multiple of 11.4 for the 167-member Bloomberg World Banks Index.