Tag: Smart Loan Express

Lessons and Pitfalls For Banks in Commercial Loan Pricing

Bank Commercial Loan Pricing Strategies

We estimate that roughly 15% of banks under $1B in assets currently use a loan pricing model (in-house or purchased).  For banks under $250mm in assets, that percentage is substantially smaller.  Furthermore, of banks under $1B, the percentage that uses a true RAROC model (risk-adjusted return on capital) is almost insignificant (we estimate that number to be less than 1%).

 

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