ALM First launches its new Profitability Calculator. This interactive, risk-adjusted profitability tool allows credit union and bank managers to model product pricing and profitability, maximize member/customer value and promote risk management.
The tool models over 8,000 different products and is regularly updated by ALM First. With web and excel-based functionality, the Profitability Calculator provides a risk-adjusted framework to set profitability targets and assess productivity of allocated capital.
Users can track rate competition based on market geography and determine required offer rate levels for entire rate sheets. ALM First’s approach to visualizing components of profitability provides invaluable insight to maximize member/customer value and promote effective product management through the evaluation of the risk/return trade-off.
Alec Hollis, Director of the ALM Strategy Group for ALM First says, “The Profitability Calculator is an on-demand tool that allows financial institutions to process their rate sheets and set product offering rates more efficiently.”
The tool provides cost-benefit insights through incorporating funds transfer pricing of loans, expected losses, capitalization rates and operational costs into a risk-adjusted decision-making framework.
Users of the calculator can easily enter data from an entire rate sheet to calculate metrics such as ROE and ROA. They can also determine the coupon rate needed to meet a desired target return.
To learn more about how the Profitability Calculator can benefit your institution, please contact us at info@almfirst.com.