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CreditStream®

Granular Commercial Loan Pricing

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CreditStream is an easy-to-use software program that provides lenders with granular loan pricing analytics, as well as information highlighting the value of customer relationships.

CreditStream is a single access point for origination analysis of deals rates, tenor and structure. Engine calculates profitability, and relationship value analytics — everything commercial lenders need to run a successful lending business. The platform compiles and processes vast amounts of data into relevant metrics and models that are delivered through an intuitive web-based interface.

Core Benefits

Price to meet stakeholder expectations

CreditStream helps calculate pricing to meet accurate ROE or hurdle rate targets. Most financial institutions, including those that have pricing models, have little basis for objectively determining how to properly set ROE targets. Too high targets, take lenders “out of the market” by forcing them to overprice loans.

Portfolio management

Identify under-performing relationships, plan improvements and bring them up to the portfolio wide averages. CreditStream provides a consistent system for tracking profitability trends over time and a sound basis for making incentive based compensation decisions that are based on profitability results.

NPV-based break-even margin

Offer spread and risk adjusted pricing, e.g., adjusted for Expected Credit Loss, tenor, liquidity premium and relationship value, etc.

KEY METRICS & DELIVERABLES

  • NPV-based breakeven margin for each transaction: This metric informs relationship managers that pricing below this level means loss for the financial institution
  • Other risk-appetite based pricing metrics include: Lifetime Risk Adjusted Return on Capital, Risk Adjusted Return on Risk Weighted Assets and Economic Value Add
  • Economic profit-based performance metric for relationship managers

KEY MODULES

Term Sheet data

Stores and captures term sheet data

Analytics engine

Pricing based on funding and risk costs, e.g., base rate, adjusted spread, tenor, Expected Credit Loss, relationship value and capital

Database

Database of quoted prices, rates and loan portfolio

Reporting

Quarterly profitability analysis

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