Announcing The Following FTP Workshops For Q4 2018:
With interest rates quickly changing direction, many banks are finding that their processes for computing and forecasting product- and business segment-level profitability are producing more noise than signal. This is not a good situation with budget season just around the corner. You have probably already figured out that poorly-developed FTP methodologies (which do not properly hedge interest and liquidity risk in loans and deposits) make it extremely difficult to manage earnings at a granular level. Furthermore, improperly constructed FTP methodologies create unnecessary and unproductive tension between Treasury and the business units when mutual support and collaboration is required.
Join me for an exciting 2-day session where we explore the purpose and practice of FTP. We will discuss the use of FTP to identity, price and transfer interest rate risk and liquidity risk from the lending and deposit gathering business units to a central mismatch center, and we will explain how to develop a funding curve which reflects contemporaneous hedging costs as well as the meaning of the earnings in the mismatch center (despite what you may have learned, they are NOT the result of an arbitrary tax on business unit earnings!).
We will also address the unique challenge of modeling NMDs. I am excited to present my NMD model which has an embedded FTP engine that is designed to ensure that the treatment of deposits is consistent in all risk AND profitability management exercises. Most importantly, the FTP methodology within the NMD Model has been specifically designed to produce FTP spread stability when deposit providers actually deliver deposits with the behavioral characteristics they have promised. (If you can’t say this about your approach to managing NMDs, then you must acknowledge there there is no way to hold the deposit gatherers accountable for the quality of the deposits they deliver; this is not good when competition for deposits heats up.).
Come see why DGA clients have come to appreciate that FTP is the most overlooked and under-appreciated business management process in banking today. They know that regardless of size or charter type, FTP is mandatory if you want to understand and explain the level and volatility of earnings at any meaningful level of granularity.
Don’t miss this opportunity to learn how to dramatically improve the story of how your depository institution makes money!
For more information about the workshop, see Funds Transfer Pricing: The Key to Effective Risk and Profitability Management.
I hope to see you soon.