ProfitStars

Profitability and Pricing

Arm decision-makers with the data needed to enhance profitability and operational efficiency.

Too often, financial institutions (FIs) allow the competition to dictate pricing without an understanding of the entire relationship profitability value when competing for new loans. This can lead to a gradual weakening of net interest margin (NIM). Typically, 20% of the client base generates most of the profit, yet many FIs are not able to identify these relationships to protect and grow.

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KEY QUESTIONS YOU MAY CONSIDER:

  • Do you know who your most profitable relationships are?
  • Are your lenders able to offer multiple pricing options to clients that meet profit objectives?
  • Do you have a way to measure officer contributions to profitability?
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"Our loan officers can make more accurate decisions, because they have more accurate information at their fingertips. No one has to guess at rates anymore."

Chris Weeks

CFO, State Bank Financial (La Crosse, WI)

WHEN YOU USE CPP, YOU’LL BE ABLE TO:

  • Calculate a risk-adjusted income statement (including future integrated CECL costs) for each relationship loan, deposit, and service account.
  • Incorporate transaction level detail to differentiate profit by channel use.
  • View summary profitability at the relationship, officer, product, and branch level.
  • Segment and report on key clients and trends for a clear understanding of what drives profit.
  • Run what-if projections for new business activity based on a combined view of historical and projected relationship value.

RELATED RESOURCES:

With Customer Profitability and PricingSM (CPP), you gain the answer to these questions through an enterprise-wide solution that empowers your frontline personnel to effectively manage relationships and strategically price new business.

FPS Risk Graphic 2