3 Things to Look for in Your Next Bank

4080473349_e464d6081e_zAnalyzing a bank may sound like a difficult task, but there are really only 3 things that you need to consider before choosing a new banking institution.

Since the era of modern banking began in 1865, more than 17,300 banks have gone belly-up. To avoid banks prone to this fate, investors should focus exclusively on companies with long histories of lean operations and prudent risk-management.

Consequently, the first number investors should look at when analyzing a bank stock is the bank’s lowest annual return on equity since 2008. If that figure is negative, long-term investors should avoid the bank altogether.

Find out more about what factors you should analyze while selecting your next bank at The Motley Fool.

Photo courtesy of: J J