Citi loses top spot to Chinese bank
Industrial & Commercial Bank of China's market capitalization
rises to $254B, exceeding Citigroup's $251B, but Citigroup remains
more profitable.
July 23 2007: 7:49 AM EDT
SHANGHAI (Reuters) -- In a fresh sign of China's financial
strength, a leap in the shares of Industrial & Commercial Bank
of China on Monday made it the world's biggest bank by market
capitalization, overtaking U.S. giant Citigroup.
ICBC's Shanghai-listed A shares surged 2.68 percent to 5.75 yuan,
giving it a market capitalization of $254 billion, according to
Reuters calculations.
That exceeded the $251 billion capitalization of Citigroup (Charts,
Fortune 500), previously the world's biggest bank, when its shares
closed at $50.73 in New York on Friday. HSBC Holdings (Charts) was
in third place with $215 billion.
Shares in ICBC, which listed in Shanghai and Hong Kong last
October, have gained 15 percent this month on the back of a rally
in China's booming stock market as well as strong growth in the
bank's own earnings.
Weakness in Citigroup's share price, and appreciation of the yuan
against the dollar have also shifted market values in favor of
ICBC.
But some analysts believe ICBC's ballooning capitalization may also
be a sign of a dangerously overheated Shanghai stock market as
speculating Chinese investors pour money into shares.
ICBC, a state-controlled behemoth which is trying to modernize a
creaky branch network operating almost entirely inside China,
reported income of $24 billion last year.
China hikes interest rates again
Citigroup, one of the world's most sophisticated financial
institutions with operations around the globe, reported income
almost four times as large, at $90 billion.
ICBC's share price on Monday valued it at 28 times analysts'
forecasts for its earnings per share in 2007, far above 11 times
for Citigroup and an average of 16 times for major global banks,
according to Reuters Estimates. Citigroup shares edged upward in
premarket trading.
http://money.cnn.com/2007/07/23/news/international/bc.icbc.citigroup.reut/index.htm?postversion=2007072307
http://www.chinadaily.com.cn/china/2007-07/23/content_5441706.htm