Bank Funds Transfer Pricing (BFTP) helps banks to improve and manage profitability of business portfolio. It helps banks identify products profitability and push more profitable products into the market. BFTP helps banks to remove interest rate risk from business units’ earnings and measure profitability of business units and off-set center. BFTP can provide data to manage interest rate risk centrally. BFTP uses Matched Maturity Method wherein every transaction is matched with a corresponding hypothetical internal funds transfer.

It has the ability to decompose net interest margin into three components:

• Lending/Investment spread
  
  
• Funding spread
  
  
• Rate risk spread

BFTP Presentation

Features

• Define Transfer Price
  
  
• Analyze Profitability
  
  
  
  • By business unit
    
    
  • By product
    
    
  • By offset center
    
    
• Analyze division of spread into
  
  
  • Lending spread
    
    
  • Funding spread
    
    
  • Interest rate risk spread
    
    
• FTP Report By Business Unit
  
  
• Off-set Center ‘Spread and Profit’ Report
  
  
• Comparison Graphs
  
  
• Sensitivity Analysis