Things aren't so bad for the Chinese banks right now: The frequently maligned companies have seen their shares soaring and their businesses improving. But things may actually get even better.
That is, several financial metrics are now pointing to the prospects of higher banking profits following a nationwide clampdown on swelling debt — and investors are paying attention.
Shares of the country's big four banks have rallied for most of this year on anticipated improvements in their debt holdings and margins. The largest bank, Industrial and Commercial Bank of China, was the top performer after its Hong Kong-listed shares surged by more than 30 percent in the first 10 months of the year. The other three major banks, China Construction Bank, Agricultural Bank of China and Bank of China, also fared well with jumps of between 9 percent and 18 percent.
Yet, their shares are still trading at a discount compared to many of their peers in the U.S., Europe and Japan, analysts said, adding that brighter prospects ahead mean Chinese banks could still trend higher — making them an attractive investment.