Chinese Banks’ 22% Profit Jump May Fail to Boost Valuations
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China’s four biggest banks, forecast this week to report higher third-quarter earnings than the four largest U.S. lenders, may be stuck with valuations near record lows amid investor concern that bad loans will rise.
Industrial & Commercial Bank of China Ltd., the world’s most-profitable lender, and its three biggest local rivals may report a 22 percent gain in combined third-quarter net income to 164 billion yuan ($25.8 billion), according to the median estimate of eight analysts surveyed by Bloomberg. That’s 41 percent more than the $18.3 billion posted by the top four U.S. banks including JPMorgan Chase & Co. in the most recent quarter.