Chinese banks are clobbering the US: Bove

A bank teller counts Chinese currency yuan notes in Beijing.
Frederic J. Brown | AFP | Getty Images

China's banks are taking over the world, or at least pushing their U.S. counterparts out of the leadership role.

Bank earnings this week in the world's second largest economy paint a dour picture for American financial institutions, according to analyst Dick Bove at Rafferty Capital Markets.

"The Chinese government is now following a policy to allow its banks to expand faster. It has reduced their required reserve ratios, " Rafferty's vice president of equity research said in a note to clients. "The United States continues to follow a policy to shrink the biggest banks in this country." (Tweet this)

The picture gets especially ugly when comparing the "Big Four" U.S. banks—JPMorgan Chase, Citigroup, Bank of America and Wells Fargo—to their Chinese counterparts, the Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China.

In 2004, the U.S. side had assets doubling those of China and net income equal to 339 percent; now those respective numbers are 71.6 percent and 50.8 percent, according to Bove.