Chinese banks feel the pain

The country's banks are grappling with interest rate liberalisation but the long-term diagnosis is for a healthier system.

China’s banking sector appears to have lost its appeal to global investors but there are signs of a possible upturn.

The trading of listed commercial banks remains depressed as the valuation of their shares dropped to a price-to-book ratio of about 1 times 12-month 2014 PB, from a 2007 peak of 4 times.

Bank of America, Goldman Sachs and HSBC have sold stakes in Chinese banks or insurance companies during 2013.

“Global banks sold their shares in Chinese financial companies mainly because of their own capital pressure. However, it also shows that Chinese banks are no longer their top pick for investment,” said...

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