Rate Sheets
The rate sheets tool is designed to help financial institutions analyze the profitability of existing and potential loans and deposits.
Rate sheets also develop pricing recommendations for consumer loans, small business loans and lines, residential mortgages, maturing deposits (CDs), and non-maturing deposits (savings and money markets).
The rate sheets tool makes it possible for senior officers (CFO, Head of Retail Banking, Marketing Director, etc.) to set consumer loan and deposit pricing. It determines the appropriate rates to meet the financial institution's ROE targets.
This tool is available as an add-on to the application's Pricing module. When coupled with the RateWatch service, you gain a clearer understanding of the competitive rate environment for your products.
Loan Highlights
The rate sheet functionality helps financial institutions develop rate sheets for lenders and mortgage originators and to update pricing for the products regularly. This tool also makes it possible to consistently and profitably price smaller loans and lines, based on size, maturities, and risk characteristics. It allows for the incorporation of existing risk rating standards, as set up in FPS. Additionally, it permits the development of unique fee structures for different loan and line of credit products.
The functionality of this tool can take variable costs associated with different consumer and small business loan products into consideration, allowing you to tailor pricing strategies to address these differences. Rate sheets develop pricing recommendations for both fixed and adjustable rate mortgages (ARMs) as well as other variable rate loan structures. It also calculates the approximate rate required to meet the Return on Equity target set by management for each included product.
Summary information for specific underwriting standards and criteria can be included.
Deposit Highlights
Rate sheets help financial institutions improve the process of pricing CDs and provide management with immediate feedback on relative CD profitability. Rate sheets also improve the process of pricing new or existing money market or other interest-bearing non-maturing deposit offerings. It calculates annualized net income for the offerings as well as the resulting Return on Equity. This calculation derives from matched funding of interest rate risk. Assigned costs and fees originate and maintain these products.
You can conduct a sensitivity analysis, based both on size and term, before setting optimal rates. Then, you can establish, analyze, and periodically update pricing policies and strategies.