How technical Financial Analysis of bank is?

Maybe this link be of some use for you.

http://www.westga.edu/~rbest/GSBLSU/finanalysis/BankFinancialAnalysisPresentation.pdf

It would not be that different from analysis of any other company. However, it requires a different approach that recognizes the unique risks of banks. This sector is also highly regulated so you will need to be aware of goverment regulations which oversee the bank's operations.

More information can be found here:

http://www.investopedia.com/articles/stocks/07/bankfinancials.asp

Financial statements for banks present a different analytical problem than statements for manufacturing and service companies. As a result, analysis of a bank's financial statements requires a distinct approach that recognizes a bank's unique risks. Banks take deposits from savers and pay interest on some of these accounts. They pass these funds on to borrowers and receive interest on the loans. Their profits are derived from the spread between the rate they pay for funds and the rate they receive from borrowers. This ability to pool deposits from many sources that can be lent to many different borrowers creates the flow of funds inherent in the banking system. By managing this flow of funds, banks generate profits, acting as the intermediary of interest paid and interest received, and taking on the risks of offering credit.

As financial intermediaries, banks assume two primary types of risk as they manage the flow of money through their business.

1. Interest rate risk which is the management of the spread between interest paid on deposits and received on loans over time.
2. And credit risk which is the likelihood that a borrower will default on a loan or lease, causing the bank to lose any potential interest earned as well as the principal that was loaned to the borrower.

As investors, these are the primary elements that need to be understood when analyzing a bank's financial statement.

Interest Rate RiskThe primary business of a bank is managing the spread between deposits (liabilities, loans and assets). Basically, when the interest that a bank earns from loans is greater than the interest it must pay on deposits, it generates a positive interest spread or net interest income. The size of this spread is a major determinant of the profit generated by a bank. This interest rate risk is primarily determined by the shape of the yield curve.

As a result, net interest income will vary, due to differences in the timing of accrual changes and changing rate and yield curve relationships. Changes in the general level of market interest rates also may cause changes in the volume and mix of a bank's balance sheet products. For example, when economic activity continues to expand while interest rates are rising, commercial loan demand may increase while residential mortgage loan growth and prepayments slow.

Banks, in the normal course of business, assume financial risk by making loans at interest rates that differ from rates paid on deposits. Deposits often have shorter maturities than loans and adjust to current market rates faster than loans. The result is a balance sheet mismatch between assets (loans) and liabilities (deposits). An upward sloping yield curve is favorable to a bank as the bulk of its deposits are short term and their loans are longer term. This mismatch of maturities generates the net interest revenue banks enjoy. When the yield curve flattens, this mismatch causes net interest revenue to diminish.

Credit RiskCredit risk is most simply defined as the potential of a bank borrower or counterparty to fail in meeting its obligations in accordance with agreed terms. When this happens, the bank will experience a loss of some or all of the credit it provided to its customer. To absorb these losses, banks maintain an allowance for loan and lease losses. In essence, this allowance can be viewed as a pool of capital specifically set aside to absorb estimated loan losses. This allowance should be maintained at a level that is adequate to absorb the estimated amount of probable losses in the institution's loan portfolio.

The Bottom LineA careful review of a bank's financial statements can highlight the key factors that should be considered before making a trading or investing decision. Investors need to have a good understanding of the business cycle and the yield curve - both have a major impact on the economic performance of banks. Interest rate risk and credit risk are the primary factors to consider as a bank's financial performance follows the yield curve.When it flattens or becomes inverted, a bank's net interest revenue is put under greater pressure. When the yield curve returns to a more traditional shape, a bank's net interest revenue usually improves. Credit risk can be the largest contributor to the negative performance of a bank, even causing it to lose money. In addition, management of credit risk is a subjective process that can be manipulated in the short term. Investors in banks need to be aware of these factors before they commit their capital.

Basically technical analysis is used to determine the direction of the price of the stock by using graph on t he basis of past data primarily consist of price and volume. It is conducted to reap the benefits for short term period. So for banks stock, the same two determinant are used besides the others to find out the trend in the prices.

Other factors such as change interest rate, flood, earthquake, political crisis, etc affect the trend of the prices. on the other hand, good turnover, good earnings, etc also affect the change in direction of the prices.