A bank health check is a comprehensive assessment of a bank’s financial condition, performance and risk management practices. It is conducted by banking regulators or independent auditors to evaluate the bank’s ability to withstand adverse economic conditions and potential risks, including credit risk, market risk, liquidity risk and funding risk.
The bank’s financial statements, including the balance sheet, income statement and cash flow statement, as well as its risk management methods, are often thoroughly examined as part of the health check.