How to analyze a bank before investing?

Recent episodes involving financial institutions such as Digimais and PicPay have raised a question among investors: how to identify whether a bank is safe before investing?

Although some applications are protected by the Credit Guarantee Fund (FGC), it is important that investors not only consider the profitability offered by institutions, but also the financial quality of the issuers.

For Marilia Fontes, presenter of Resenha do Dinheiro and economist, these cases show that banks that quickly expand their credit portfolios and take on high risks face financial difficulties.

"In some cases, the accelerated growth of the credit portfolio was accompanied by operations that ended up masking the deterioration of the institutions' balance sheets", he states.

In addition, there is a recurring pattern among banks that have suffered problems in recent years, analyzes Thiago Godoy, financial educator.

"The incentive is usually the same: very rapid growth in the credit portfolio and CDBs offering remunerations well above the market average. These are signs that deserve investor attention", he says.

In general, returns significantly higher than those offered by large banks usually reflect a higher level of risk.

"If a large bank pays a CDB close to 100% of the CDI and another offers 140%, the investor needs to understand why this difference exists. Higher profitability is normally accompanied by greater risk", highlights Godoy.

In addition to remuneration, the financial health of the institution must also be considered before applying.

"The ideal is to check whether the bank maintains consistent results over time, generates profits even in periods of crisis and presents a Basel Index above the regulatory minimum. When the investor is unable to carry out this analysis, they can turn to a trusted professional or institution or simply avoid riskier institutions so as not to be tempted to look only at profitability", explains Fontes.

Bernardo Pascowitch, founder and CEO of Yubb, assesses that recent episodes also reinforce the need to improve supervision over the financial system, especially given the increase in the number of institutions in operation.

"The FGC is an important layer of protection, but it does not have unlimited resources. Therefore, it is essential that investors understand the risks before seeking only the highest returns", he states.

The financial educator also recommends that investors avoid concentrating all their resources in a single financial institution. Diversification between banks with different profiles can help reduce risks and increase portfolio security in the long term.

"Nothing prevents investing in smaller banks, but it makes sense to balance the portfolio with larger and more solid institutions", adds Thiago.

Dinheiro Review
Carried out with the support of B3 and the investment manager BlackRock, the program is presented by Thiago Godoy, the "Financial Daddy", Marilia Fontes, founding partner of Nord Investimentos; Bernardo Pascowitch, founder and CEO of Yubb, proposes a light, direct and uncomplicated approach to topics related to financial education and investments. The attraction addresses the main themes of the economy weekly with the informality of a conversation between friends - without compromising on analysis.

The Money Review airs every Friday, at 7pm, on the CNN Money YouTube channel and on Sundays, at 3pm, on CNN Brasil.

Source: CNN