Do you care about bank's financials?
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Just look at the balance sheet firstly and see assets and liabilities. Then just look at the P/L. It's also best to look at the latest quarterly report rather than annual depending on time of year.
See below thread where I looked through Maerki Baumann Bank and determined it was unprofitable garbage ripe for a takeover hence their pivot to crypto.
https://www.offshorecorptalk.com/threads/maerki-baumann-bank.37983/post-221227
Size matters...no pun intended. But equally as important is the systematic importance of a bank in the country it operates. For example BOV in Malta is a systematically important bank so︀ will be aided by gov. Same with BoG in Georgia, RBS (Natwest) in UK and︁ CS in Switzerland etc. The gov will always aid such banks if they will have︂ material effect on population or industry.
So there is no magic size as a 10m︃ bank could be as safe as a 1bn bank if it is a systemically important︄ institution in the country. So for example if you see a bank with $40m in︅ deposits and its P/L has been -1,800,000 (loss) for like 2-3 years and it is︆ not systematically important then run away - especially if its in some banana republic like︇ my own etc.
Another example is I had for example been warning people for years︈ about EPB - full reserve bank or not means nothing as EMI's go bust everday︉ due to operating costs and they are full reserve also. Had they published their financials︊ instead of keeping it private people would have been able to see early on they︋ did not make money and you were at risk banking with them. People can argue︌ all they want over real reason it got closed but that is neither here nor︍ there sadly. Always take a glimpse of the balance sheet and if they don't publish︎ financials then at best just use it as a pass-through bank and nothing more!!!
See below thread where I looked through Maerki Baumann Bank and determined it was unprofitable garbage ripe for a takeover hence their pivot to crypto.
https://www.offshorecorptalk.com/threads/maerki-baumann-bank.37983/post-221227
Size matters...no pun intended. But equally as important is the systematic importance of a bank in the country it operates. For example BOV in Malta is a systematically important bank so︀ will be aided by gov. Same with BoG in Georgia, RBS (Natwest) in UK and︁ CS in Switzerland etc. The gov will always aid such banks if they will have︂ material effect on population or industry.
So there is no magic size as a 10m︃ bank could be as safe as a 1bn bank if it is a systemically important︄ institution in the country. So for example if you see a bank with $40m in︅ deposits and its P/L has been -1,800,000 (loss) for like 2-3 years and it is︆ not systematically important then run away - especially if its in some banana republic like︇ my own etc.
Another example is I had for example been warning people for years︈ about EPB - full reserve bank or not means nothing as EMI's go bust everday︉ due to operating costs and they are full reserve also. Had they published their financials︊ instead of keeping it private people would have been able to see early on they︋ did not make money and you were at risk banking with them. People can argue︌ all they want over real reason it got closed but that is neither here nor︍ there sadly. Always take a glimpse of the balance sheet and if they don't publish︎ financials then at best just use it as a pass-through bank and nothing more!!!
This thread was my main reason to start looking into bank financials back then 🙂 Thanks for it.
BoG, CS, and BOV in Malta are great examples, thanks.
When it's not state-owned, like ABC in Mauritius / Adriatic in Podgorica, is there a way to determine bank's importance? My idea was maybe from financials, like value of securities that they hold compared to other local banks?
BoG, CS, and BOV in Malta are great examples, thanks.
When it's not state-owned, like ABC in Mauritius / Adriatic in Podgorica, is there a way to determine bank's importance? My idea was maybe from financials, like value of securities that they hold compared to other local banks?
Normally the government lists them for each country somewhere. But Wikipedia may help with a few countries below.
https://en.wikipedia.org/wiki/List_of_systemically_important_banks
You cannot tell from financials if it is D-SIB. Best to even ask government if in doubt for smaller countries.
https://en.wikipedia.org/wiki/List_of_systemically_important_banks
You cannot tell from financials if it is D-SIB. Best to even ask government if in doubt for smaller countries.
Maybe.
Smaller countries very often lack resources to "aid" it's banks during a crisis.
Georgia, for instance, will have a hard time supporting BoG/TBC since these banks are too large for government coffers.
And then we have Cyprus .... 🙄
So, simple strategy: Do not exceed the maximum insured amount. If that amount is too low (for you), either look elsewhere, split the amount between different banks of the same jurisdiction or put your money in securities (bonds, stocks, ETF,. mutual fund). For the latter option, make sure that these assets are separated.
Smaller countries very often lack resources to "aid" it's banks during a crisis.
Georgia, for instance, will have a hard time supporting BoG/TBC since these banks are too large for government coffers.
And then we have Cyprus .... 🙄
So, simple strategy: Do not exceed the maximum insured amount. If that amount is too low (for you), either look elsewhere, split the amount between different banks of the same jurisdiction or put your money in securities (bonds, stocks, ETF,. mutual fund). For the latter option, make sure that these assets are separated.
That's no guarantee depending on country. During last financial crisis US FDIC was days away from going bust. I discussed this below in 2022. Look at 2009 FDIC balance sheet for yourself....lol.
https://www.offshorecorptalk.com/th...tside-the-u-s-a-be-devalued.36740/post-205801
AAA Government Treasury Bills are best option thu&¤#. I︀ discussed this also below back in 2020. Just find a nice AAA liquidity fund that︁ invests in short terms treasury bills and park your money there if you don't want︂ to buy the bills directly.
https://www.offshorecorptalk.com/threads/stored-value-vs-bank-accounts.28241/post-121804
https://www.offshorecorptalk.com/th...tside-the-u-s-a-be-devalued.36740/post-205801
AAA Government Treasury Bills are best option thu&¤#. I︀ discussed this also below back in 2020. Just find a nice AAA liquidity fund that︁ invests in short terms treasury bills and park your money there if you don't want︂ to buy the bills directly.
https://www.offshorecorptalk.com/threads/stored-value-vs-bank-accounts.28241/post-121804
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