The banking monitor is used to gauge the health of the bank within 2 minutes.

Here is how to tell if your investment is safe and growing.

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1. The Vital Signs

The top row tells you if the bank is healthy right now.

• Net Profit: Is the bank making money?
• Gross Impaired Loans (GIL): The percentage of “bad” loans. Keep it under 2.0%; anything higher suggests the bank is lending to the wrong people.
• CET1 Capital Ratio: The cushion the bank has in case their customers starts default on their loan. The higher, the better.
• Cost-to-Income Ratio: Measures efficiency. If this is falling, the bank is getting leaner and more profitable.

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2. The Income and Operational Efficiency

• Revenue Composition: Look at the trend of the net income and net interest income. Is it going up or down?
• Operational Efficiency: Look at the trend of cost to income ratio. Is it going up or down?

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3. The Safety Net

Banking is about managing risk. These charts show the bank’s “shield”:

• Loan Loss Coverage: This compares bad loans to the cash set aside to cover them. Stay in the Green Zone. If it dips toward red, the bank might be under-insured.
• Capital Buffer (CET1): This is the bank’s rainy-day fund. As long as it stays well above the red dotted line (the regulatory floor), your capital is secure.

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4. The Growth Engine

A healthy bank must grow its core business to sustain dividends.

• Loan Portfolio Growth: Look for a steady upward slope. This means the bank is finding new, quality borrowers.
• Islamic Banking Income: A major growth driver in Malaysia. Ensure this line is trending up.
• Dividend Per Share: The ultimate reward. Check the history for consistency—this is why you own the stock.

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5. Leverage Analysis

A healthy bank must grow its core business to sustain dividends.

• Debt to Equity Ratio: Look for the trend of the graph. Increasing debt to equity ratio means the bank is getting aggressive in giving loans.
• Debt to Equity Ratio: Look for the trend of the equity, liability and asset growth. It shows how the banks grows its asset, via equity or leverage.

Always look at the trend for the KPI. The track record of the bank is important. Always look for continuation for good banks, and trend reversal for turn arounds.