In less than a year three banks have been put under receivership in Kenya, with the latest being Chase Bank. This has resulted in panic among depositors, with many Kenyans wondering whether their money is safe at all in their current banks. Well, here are a few pointers on the attributes of a good and strong bank.

1. Security of your funds

Lately, anyone who has been watching television or reading newspaper headlines may be asking themselves, whether their money is really safe in the bank. With all the drama, stashing your cash into a mattress may seem like the simplest and safest bet. Your bank should follow sound financial practices so that it does not sink with your money.

2. Is it listed?

With banks collapsing, having one that is listed means it has to comply with a wide range of additional regulatory requirements and meet accepted standards of corporate governance. This makes your investment safer whether as a shareholder or customer. It is easy to monitor the financial health of a listed bank because they publish financial reports which are available to the public for scrutiny.

3. Competitive advantage

Sometimes called an economic moat, a competitive advantage is when a company has a leg up over its competitors through its superior products, patents, brand power, technology or operating efficiency. The strength of a bank is tied to its ability to wrestle market share from competitors, if its market presence is solid then that is enough endorsement it’s a healthy institution.

4. Debt-to-equity ratio

This way you can find out how much debt a company carries compared to the amount of equity shareholders have in the company. A bank with a low amount of debt in relation to its equity (total debt levels that are no higher than the company’s total equity levels, a ratio of 1.0 times or lower).

Used as a safety measure, these ratio tests how well the company can repay its debt obligations in the event that the company runs into serious financial problems. Generally, the lower the debt-to-equity ratio a company has, the less risky it is to you as an investor.

5. Operation history

Google it! Find out what drama has been associated with the bank, how it has behaved during financial turbulence and its reputation as a company. Does it have operational integrity, lack of which is blamed for the crumbling of banks? Get a bank that respects you and your hard-earned money.

6. Interest rates

Interest rates work both ways: the rates you receive on your money on deposit with the bank, and the rates you pay when borrowing via credit card or loan.  Ideally, you will find an account that pays higher-than-average interest on your deposits and charges lower-than-average interest on your debts.

7. Minimum balance requirements

Some accounts require you to maintain a minimum balance before they begin charging account fees.  Make sure any minimum balance requirement is something that you can comfortably afford.

8. Branch availability

Some people cannot be comfortable with a bank that does not have a physical location nearby.  Think about your needs and determine what is important to you. Availability of branches means you are able to transact your financial affairs promptly and without much hassle.

9. Customer service

You want a bank that values you and will go to any length to ensure you get the best services, not one that makes you wait more than a dozen hours to serve you. When you have a problem or question, the last thing you want is to sit on hold, or get a customer service representative who is unhelpful or not nice. Efficiency is important.

10. ATM fees and network

First you should be able to withdraw money easily without having to travel kilometres. If you use your ATM card frequently, definitely consider the fees your bank does or does not charge for ATM usage.  Some banks offer to rebate ATM fees up to a certain amount each month.  If you travel frequently and can’t always use your bank’s ATMS, this might be important to you.