Taking a closer look at a bank might seem daunting, but it essentially boils down to three key factors before deciding on a new financial institution. Since modern banking began in 1865, over 17,300 banks have failed. To avoid investing in banks that might follow this path, investors should focus on institutions known for efficient operations and careful risk management.
First and foremost, investors need to check the bank’s lowest annual return on equity since 2008. If this figure is negative, it’s a clear warning sign that long-term investors should avoid that bank.