China's overvalued banks

China is now home to the world’s biggest bank, by market value, and two of the top three. Its Shanghai initial public offer pushed the market capitalization of China Construction Bank to $227bn, edging Bank of America, at $225bn, into fourth place. Bank of China ($279bn) now leads America’s Citigroup, in second place at $232bn. But the Chinese banks are over-valued, on prospective earnings multiples of almost 30, against a historic multiple for Citi of 10.8. Fool’s gold.