Do you have savings in banks? Are you afraid that your bank will become bankrupt or insolvent due to economic crisis? With the current economic state, it is just normal to worry about the financial standing of banks due to the prevalence of bank closures and bankruptcies nowadays.

Did you know that the global economic crisis that took place between 2008 and 2009 not only affect ordinary individuals, small and medium businesses, financial institutions and organizations, but also small and big banks worldwide. The dire economic situation resulted to massive dismissal of employees, shutdown of industrial factories, closure of stores and filing of bankruptcies not only for individuals, but also business enterprises.

Because of these scenarios, investors are afraid to put up their investments, while some people, like you, are afraid to save their money on banks. To avoid risking your money on unhealthy companies, you should assess their financial performance and evaluate signs of unhealthiness.

Instead of depending on press releases and advertisements, it is best to conduct research yourself. With the cornucopia of information found on the web, use the Internet to conduct an unbiased investment analysis of the bank or company that you intend to put on investment. This way you will have a better understanding on the current economic situation and you will be presented with vast information.

Signs of a healthy

* Healthy companies have increasing or higher profit margins on operations than the average set by the industry.
* These companies have excess cash flow.
* These firms managed to have earnings growth despite the onset of recession.
* These banks by reasonable price-to-earnings ratio (P/E) and their P/E should not be greater than 25% of their stock earnings growth rate.

Other signs of a healthy bank or organization:

* Management and employees have one focused mission.
* Healthy companies have pervasive service attitude focused on the needs of customers.
* These companies have faith in their ability to win, to profit and to prevail.
* They are committed in boosting the health and well being of their employees.
* They offer employees opportunities for career development and further learning.
* They show commitment for corporate social responsibility.
* These firms have diverse product lines and diverse type of customers.
* Healthy companies have low level of employees’ complaints, fightings and power struggles. Workers in healthy firms are willing to jump to other departments to help out.
* Healthy working environment has a two-way communication and management values employees as its intangible assets.
* Top management show supportive supervision to their workers and employee participation are practiced and highly encouraged.
* These companies offer workers opportunities to learn things and gives priority to work-life balance.

Ways to determine the financial standing of a bank before opening an account:

* Check news reports of the bank where you consider opening an account.
* Inquire from the FDIC on the general financial status of the company.
* Select banks that have improving ratings for several quarters and managed to maintain their ratings despite the onset of recession.

Author Bio: Hannelore Willingham enjoys writing for Riverrocksvcs.com which offers information on bank marketing and customer incentive programs as well as a host of additional services.

Category: Business
Keywords: economic crisis,economic indicators,banking industry