Manage Risk to Create Sustainable Earnings Market

Together with profitability and market, enterprise risk management is one of the three main drivers of overall franchise value. BankAnalyst® Risk is the starting point for accurately identifying where a bank should apply resources to effectively and efficiently manage its risk.

An Innovative Approach to Risk Measurement

BankAnalyst® Risk is designed to assist bank executive management in the allocation of institution resources to manage or mitigate the enterprise risk of the institution. The tool introduces a new approach to examining enterprise risk and its influence on franchise viability and earnings volatility. Our MVSCALE system focuses on and scores your bank’s exposure in seven (7) enterprise risk components:

  1. Market Area Risk – footprint size and industrial concentration
  2. Velocity Risk - relative market, or velocity, of the franchise
  3. Strategic Risk – institution’s portfolio diversification
  4. Capital Management Risk – capital adequacy, generation and exposure
  5. Asset Quality – asset loss rate, exposure and coverage
  6. Liquidity Risk – relative short term funds generation capacity
  7. Earnings Composition – volatility and sustainability of earnings

Each of the seven risks are scored and weighted to calculate an enterprise risk score for the institution. The institution’s relative risk, at an enterprise level and for each component, is classified on a five (5) point system with 1.0 reflecting the lowest relative risk and 5.0 reflecting the highest relative risk. These quantitative scores relate to a classification description:

  1. Exceptional
  2. Strong
  3. Moderate
  4. Sub-Optimal
  5. Weak

In addition, the five (5) period annual or quarterly direction, or trend, of the risk category is measured based on the change in percentile ranking for the period and classified as:

  1. Major Improvement
  2. Improving
  3. Stable
  4. Declining
  5. Major Decline

Comprehensive Data and Decades of Experience

A great deal of experience goes into the conclusions that BankAnalyst Risk delivers. Each quarter we perform a comprehensive analysis of every bank and thrift in the country. Plus, we have more than a decade of experience conducting thousands of planning sessions with bank executives. By comparing your organization with similar banks, we use exception analysis to identify areas where your bank's risk factors score higher than your closely aligned peers.

A BankAnalyst subscription includes a Senior Bank Strategist to assist your team. Learn more.

Web Conference

Schedule a
Planning Session

An experienced
Bank Strategist will:

  • Conduct a 60 minute online planning session— customized to your bank.
  • Involve your C-level executive management team.
  • Use your bank's custom financial and market analysis.