"Everybody hates them," he noted. "They hate them because there are lots of things to worry about. Otherwise, there wouldn't be trading at that valuation."
But that's no reason not to buy them, he said.
"Many people are skeptical about China for very good reasons. The question from an equity market investor's perspective is to what extent has that all been priced in to markets," he said. "Given the fact that we are at very low valuations, a lot of very legitimate concerns are already priced in to the market."
(Read more: Are China bank stocks cheap or just crummy?)
China's credit concerns are also hardly a secret, he noted. "The Chinese know perfectly well they've got to restructure the financial sector," he said. "They're moving in the right direction."
It also isn't a given that the listed plays will bear the brunt of any loan defaults, he noted.
"The problems that exist in the Chinese financial sector are much more at the lower end of the spectrum. I'm sure you will have defaults. You might even have bank failures. But they're much more likely to be at the local and provincial banks than in the big listed banks," he said.
(Read more: China's bad-loan skeletons to haunt markets)
Titherington isn't alone in seeing a bargain-buying opportunity.
"We see the current weakness as an opportunity for investors to add to their stakes of large state-owned banks," CIMB said in a note after the sector came under increased pressure earlier this week when China issued fresh curbs on its shadow banking system.
"At this stage, the sector's most important catalyst is the gradual emergence of benefits as a result of China's tentative steps towards economic reform," it said.
CIMB likes large state-owned banks like ICBC, China Construction Bank and Agricultural Bank of China. But it expects banks which have relied heavily on links to the shadow banking system through large exposures to wealth-management products or innovative interbank credit, may face an earnings hit. Those banks include Bank of Communications, China Merchants Bank, Citic Bank, Minsheng Banking and Chongqing Rural Bank.