Quantitative Loan Portfolio Management Process

Step #4: Profit Maximization

Step four of the quantitative loan portfolio management process is the maximization of stockholder value by creating a risk-efficient portfolio - a portfolio that maximizes the expected return for a given level of risk.

The goal is to reduce portfolio risk and volatility while maintaining and/or increasing portfolio risk-adjusted returns. Risk-adjusted returns can be a risk-adjusted return on capital (RAROC) or risk-adjusted return on asset (RAROA).
   

Supporting Solutions:
 
Risk & Return application
identifies and trends sub-portfolio risk-adjusted returns, along with loan level and customer level risk-adjusted returns.
Customer Profitability application
identifies the risk-adjusted return of each loan to a customer, along with the risk-adjusted return of the total customer relationship.
Customer Cross-Sell application
to identify qualified new business development opportunities.

Copyright 2004 Loan Analytics, Inc. All Rights Reserved. Created by Exodus Design Studios