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Vertical Solutions and Application Management

Risk Control - PRA Pricing Risk Adjusted

The aim of “Pricing Risk Adjusted” is to simulate the price of lending transactions. The “target” price of the transaction is developed bottom-up by defining a break-even spread, which takes into account all components of the transaction to be remunerated, including expected loss, cost of capital, cost of funding and operating costs. In addition to the break-even spread, the tool also allows the “target” price definition to include any discounts tied to cross-selling and the mark-up and mark-down for market segment, economic sector, geographic area, rating, profession, loan to value.

Finally, and in line with that defined in terms of pricing, the tool provides indications regarding the creation / destruction of value associated with the transaction (transaction with positive or negative EVA®).

The pricing risk calculation tool is integrated with the New Sales and GUC (Gestione Unificata Condizioni - Consolidated Management of Terms) processes.