Thursday, July 26, 2007

Chinese Bank Breaks Record

On Monday, July 23rd, Reuters announced that the Industrial Bank of China (ICBC) surpassed Citigroup in terms of market capitalization, and is now the “largest” bank in the world. However, it still doesn’t mean the bank is truly the greatest in the world. It simply means that investors in Shanghai actively trade the stock, pushing it up higher. Names like Bank of America, Citigroup, UBS and HSBC will still not be forgotten in today’s competitive world. ICBC’s profits in 2006 of USD 6 billion are one third of Citigroup’s and its return on equity of 14 percent is quite weak even in the Asia-Pacific marketplace. It’s price-to-earning (P/E) ratio of 25 times earnings is quite high for the banking sector, averaging 15 times earnings. All in all, ICBC is overpriced value made it the record-breaking largest bank in the world.

5 comments:

Anonymous said...

I am not that surprised to be honest. China is big and still at the infant stage of development so we should see more record breaking sales or performances in the future.

Anonymous said...

Let's see how the Chinese stock market reacts to the latest plunge in the US market on Friday.

Anonymous said...

I don't trust Chinese banks.

Lina Trivedi said...

I missed that on the local news!

Anonymous said...

Interesting... looking forward to more posts on Chinese companies!