China’s big banks have become the Marmite of the investing world – investors either love them or hate them. The banks’ critics regard them as policy arms of the state with questionable bad-loan accounting. Yet they have produced forecast-beating first-half profits. They also feel they are producing strong, good quality profits and returns. The chairman of ICBC, the biggest of them all, said last week he thought detractors were “a little bit unfair”.

Based on returns, China’s banks have a point. There are 30-odd banks in Asia with a free float over $10bn. Of those, China’s worst performer is Agricultural Bank of China, which has averaged a very decent 16 per cent return on equity over the past five years, according to S&P Capital IQ data. China Construction Bank and ICBC have both produced, and are producing, an ROE of more than 20 per cent. Australia’s big four, which are market darlings down under, managed 15 per cent. Japan’s struggling behemoths eked out 4 per cent. Even Singapore’s banks, with their exposure to the formerly booming southeast Asian economies, have produced just 11 per cent.

But trust matters more than a good record when the future looks rocky. China’s banks are trading at just above their book values – half their valuation of three years ago. Bank of China is even trading as low as 0.9 times book, or about the average of Japan’s big three. This suggests that investors are prepared to take the banks’ word for it on asset values but allow no premium for emerging market-like growth – the sort that Malaysia’s Maybank, at 1.9, carries. Even the Singaporeans average 1.3.