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How to Practice Loan Pricing Discipline

South State Correspondent

Bankers need to manage credit relationships to ROA/ROE and not credit spreads. Objectives of Loan Pricing We believe that all national banks and most banks over $10Bn in assets (regionals) are using some version of a risk-adjusted return on capital (RAROC) loan pricing model. Why do banks use RAROC loan pricing models?

How To 195
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How Loan Size Impacts Commercial Loan Profitability

South State Correspondent

When we analyze the same size/ROA relationship using banks’ efficiency ratios, it is not surprising that community banks (under $10B in asset size) have, on average, a 5% higher efficiency ratio than regional banks ($10B to $50B in asset size) as shown in the graph below. Larger loans have lower credit risk, all else equal.

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How Loan Size Impacts Commercial Loan Profitability

South State Correspondent

When we analyze the same size/ROA relationship using banks’ efficiency ratios, it is not surprising that community banks (under $10B in asset size) have, on average, a 5% higher efficiency ratio than regional banks ($10B to $50B in asset size) as shown in the graph below. Larger loans have lower credit risk, all else equal.

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Visa On The Role of ‘Super Apps’ In Driving Emerging Market Growth

PYMNTS

In the case of Dubai-based ride-hailing and delivery platform Careem and its efforts to modernize payments in the Middle East North Africa (MENA) region, add “timely” to the list. Just how important that ability is became quickly evident during the global pandemic, as the MENA region shut down like the rest of the world.

Marketing 241
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Chinese P2P Lender Blames Gov’t For Growth Decline

PYMNTS

“While the industry has expanded quickly to a large and complex scale over the years, regulatory directions keep changing and different regions have different rules.”. We hope regulators can give the industry a clear and definite timetable, and give guidance and a ray of hope for companies that stick to compliance,” Guo said.

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Row in the Same Direction: Branch Profitability in Practice

Jeff For Banks

It's a sure way to have the un-empowered branch manager calling the regional manager for rate exceptions to win new money or keep money at the bank. But that is certainly what you are motivating branch managers to do if you use deposit growth as one of their strategic goals. How does that translate to the branch manager?

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Secure By Design: Why Privacy Must Be Baked In To IoT Devices

PYMNTS

Isabelle Noblanc, VP and general manager, Identity Management and Security at UL, said the answer to these concerns is to practice security and privacy by design, not as an afterthought. This complexity is the reason traditional identity management must be rethought, Noblanc said. Pros and Cons of Regionalization.

Security 197