3 easy ways to choose a healthy bank

 By the time people started to realize the importance of saving money in the bank, some banks suddenly collapsed and shut down the government. Many people recoiled in shock, including me. We began to think again: maybe the same money in the bank is not safe to keep money under the pillow. We had misgivings. Moreover, at that time, guaranteeing clients' money in banks liquidated by the government yet.The government then tried to calm by saying that the government ensures that customers' money in the bank. However, the nightmare of national banks already burst in our minds. Our consciousness to choose a bank even arise. Not all banks was of good quality. Therefore, it can no longer save money in any bank. The problem is, we do not know what a decent bank we choose to save money. There is no simple way to see which bank is safe as a place to save money?If, lately many people are confused in choosing a bank, it is natural. Experience liquidation has caused concern. Indeed, the fund remains secured. The problem is, withdraw funds from the bank liquidated really troublesome. Not only had to queue for hours, but the procedure is often annoying. It is lucky if they are served with a smile. In fact, in addition to spending time, payor bank services generally disappointing. Tend to be bureaucratic and slow. Rather than hassle, many people ultimately prefer liquefy deposits, although the bank where his money is actually healthy.The problem, choosing a bank is not a simple matter. Choosing a bank is not much different from choosing a mate. Must be used seedlings, ancestor, and weight. Regarding the seeds, for example, can be analogous to the background banker. The banker previously worked as a trader, usually, he will also use commercial means, in managing the bank. Then ancestor. This context can be interpreted as the quality of bank assets. Bank asset quality is good, as a rule, income is also good. Meanwhile, the weight, can be interpreted as management ability in managing a bank or banker. Typically, bankers are "flying hours" - is already high will be more careful in managing the bank. In another version, the age-old bank can be more than the bank established a new stand. Outside the parameters of "psychological" that, empirically, there are several indicators that deserve to be a reference for the detection performance of the bank.First, the Bank RateThe higher the interest rate offered, especially if compared to banks with assets equal, the higher the risk of the bank. The argument is simple. Banks are intermediaries (intermediary) in managing funds that have adhered to the principle of compliance maturity (maturity). Banks are cautious people are usually short-term funds into short-term credit as well. While the long-term loans financed from long-term funds. In practice, there are banks that use short-term funds for - say - to finance property projects that are clearly long-term. This clearly violates the principle of prudence (prudential banking).The issue becomes more chaotic when a long-term repayment, certainly, the banks will face liquidity problems. On the one hand, the bank must pay the funds due. However, on the other hand, the source for paying deposits did not exist. Therefore, funds are embedded in long-term loans. To get around problems like that, the bank will usually run to the money market and looking for a loan there. However, the cost is very expensive and not necessarily the required funds are available. As a result, the bank was forced to seek new funds from the public.To be attractive, the bank then set a very high interest rate. Often much higher than the prevailing interest rates generally. However, it might as well dig a hole close the hole. When the hole is no longer covered, as demonstrated experience, dozens of banks forced to liquidate. Hence, you should avoid putting money in banks put up interest rates too high.Second, Ownership Structure and Management.Many troubled banks are banks that management and owners have ties too tightly. Say, a bank owned by the A. Later, the director or the management ranks are relatives of the A. If so, it seems likely collusion between them. Or just be a puppet management.On the other hand, there are banks that are owned by one person or a single majority. The owners were too powerful usually tend to intervene. Especially if the owner has other business areas in need of credit. It is not possible, the bank is only made of dairy cows. Generally, bank owned only one person would be difficult to operate in a professional manner. Therefore, there is no provision of a balanced (balancing control) of the other party. So do not put expectations on bank ownership only controlled by one person.The question is, how to know a bank controlled by a single majority or not? Easy. Find the financial statements of banks publication in the newspaper. Pay attention to the bottom of these financial statements. Typically, there is a column about the bank owner complete with percentages of ownership. Of the column, you will find out whether the relevant bank owned by a handful of shareholders or not. Moreover, if the owner of the bank in the form of the company, you will also find out if the company has a bank is a group effort or not. The conclusion is simple, if a majority of shares owned business groups, empirical experience shows, most bank loans are definitely channeled to the group effort. Instead you are careful with such a bank.Third, Asset GrowthBe aware of the amount of bank assets suddenly become so big. While growth is a good thing, as a rule, it should be gradual. Very risky if the bank's asset-ujug ujug enlarged for no apparent reason. Perhaps, too expansive bank lending. It is not perhaps too much bank lending to the group itself. Or, even bank debtors capitalizing interest arrears into a new principal.In addition to simple indicators above, there are other approaches in detecting whether a healthy bank. This approach is commonly referred to as CAMEL (capital, assets, management, earnings, and liquidity) factors. However, to use this approach is not easy. In addition to technical issues, the results are not necessarily true. If you do not want spinning, as well forget it.Remember, choosing a bank should not be based on looks outward only. gift, a vigorous campaign, or higher interest rates, though tempting, do not necessarily provide "honey". It must be understood, flowery flattery there is often wants. In fact, it can be toxic. Just look at the number of banks that have been closed. Many unexpected. That bank. Although the zoom is gorgeous and full make-up, not necessarily a healthy body. So, it is better to choose a bank that even if the appearance is not high-profile but healthy, rather than the banks that seem charming but porous.