Does the retail investor easily understand the sector, its dynamics and its prospects?
Since we are discussing about the banking sector, the investor needs to first understand the sector dynamics thoroughly before making any investment decision. A detailed article on how the banking industry functions, has been carried by us. The current status as well as the prospects of the industry has to be analysed well. Is track record of the bank important? The performance history of the bank is a very important factor that needs to be considered when analyzing any company. The history indicates the strategies adopted by the bank, its success or failures and whether it is a laggard or a leader. The financial performance of the company indicates the effects of the decisions it has taken in the past. It also indicates the financial health of the bank. The history of the bank should also be analysed well enough to understand the position of the bank in the sector as a whole. Further, in case of banks it is imperative that one looks in to the quality of assets (NPA levels) that the ba
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