FTP is a management accounting technique to understand where profits are emanating such as high yield assets and low cost liabilities, and to help enforce bank’s strategy with operational users. A good FTP system is a must for reasonably sized banks with multiple strategies.
Surya’s FTP product provides banks with ability to measure and evaluate net interest margin and compute profitability across assets and liabilities. It takes complexity out of FTP calculation by considering embedded market risk, using multiple transfer pricing methods.
It takes into consideration accounts, customers, products and business lines factors by facilitating assignment of distinct FTP rates for various pools determined by product and customer mix and dimensions like product groups and customer groups. Dimensions may be extended further depending upon the requirements.
features at a glance
to allow base, yield curve, branch and business line definitions
of assigning FTP rules to products, define multiple spreads on base curve, choose calculation methods, and assign an FTP curve
Reports and Analyses
provides reports and analyses on FTP interest and final FTP rate, profitability, division of spread, business unit FTP and net income calculation
FTP HELPS BANKS TO
Fix transfer price using “multiple pools” and “matched maturity” approaches
Improve visibility into profitability at multiple product, customer and business unit (branch) levels
Identify well-performing and underperforming products, units and investments
Incentivize products based on strategy
Price complex products, including those with irregular cash flows and indeterminate maturities