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Pricing Loans in Volatile Market Conditions


Additional information


Presenter:  Darryl Mataya, Abrigo

This 90-minute program will be presented live on: November 10 – 2:00-3:30 p.m. Central Time

Recording available through: February 10, 2023

Price: $330

Many institutions now use a systematic loan pricing methodology or model, and those that don’t are either considering or implementing a pricing system. But loan models don’t tell you what rate to charge. If setup well, they give you a relative measure of value or profitability which can then be used to make more informed loan pricing decisions.

In this webinar, we start by reviewing how modern loan pricing models work, and some of the difficulties institutions face when they attempt to implement a new model or approach. We review risk-based pricing approaches, and we cover how to manage assumptions and how to integrate models into an institution-focused pricing methodology.

Then we turn our attention to the realities of pricing loans when the markets are constantly shifting on us. We discuss why loans priced a few months ago now look unprofitable, and why that may not matter. We look at funding costs and risks, and why pricing duration is critical in managing interest rate risk. We use case studies to illustrate the challenges in pricing when market rates could change tomorrow. Examples are used from commercial relationship pricing to consumer rate sheet pricing.

Learning objectives:

  • Understanding modern loan pricing methodologies.
  • How risk is managed in loan models.
  • How pricing models are affected by market rate changes.
  • Understanding the relationship between loan characteristics and interest rate risk.
  • Learn strategies for managing frequent market rate changes.

Target Audience:  CEOs, CFOs, ALCO members, controllers, chief risk officer, chief retail, funding officers

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