Eastern Europe’s banks Overcooking the goulash

Investing in Central and Eastern European banks has been a winning bet. Since the start of 2003, shares in the biggest players have nearly tripled. But now they look overvalued. Look at Sberbank, Russia’s largest bank by assets. Its shares, which have risen by 450% over the period, trade on a multiple of 18 times forward earnings. Polish banks like Bank Pekao and BPH trade on 19 times. That compares with an average of 12.5 in Western Europe. In this environment it’s no surprise that some prett...