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.
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