China’s Big Four Banks See $70 Billion Vanish From Stocks

The world’s most-profitable banks have never been so unloved by stock investors.

China’s four-biggest lenders, which reported $126 billion of earnings in the 12 months through September, sank to the lowest valuations on record in Hong Kong trading yesterday. The MSCI China Financials Index dropped to an almost decade low versus the global industry benchmark while the market value of Industrial & Commercial Bank of China Ltd., the nation’s largest lender, fell below net assets for the first time on March 12.

The state-controlled banks known as China’s Big Four are getting squeezed by slower economic growth and rising bad debts just as policy makers open up the nation’s financial system to non-government competitors. Their shares have lost $70 billion of value this year, equivalent to the size of New Zealand’s entire stock market, even as U.S. and European peers rally. Wells Fargo & Co. and JPMorgan Chase & Co. have knocked ICBC from its ranking as the world’s biggest bank by market value.

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Ye Xie and Weiyi Lim, Bloomberg News via CHINA US Focus http://ift.tt/1ilJ8x7