Community Banks and Credit Unions need to optimize their use of capital. Very often, due to internal constraints (risk management guidelines, historical data, risk analytic resources), many institutions lack the clarity or certainty on the level of reserve capital to hold that is aligned with the risk profile at their institutions. As a result, many of these institutions either hold excess capital reserves or are seriously under capitalized.
Our Capital Optimization Modeling Services assist financial institutions improve their understanding of the capital reserve levels that are best aligned with the historical risk trends in their portfolios. The potential benefits from our Capital Optimization Services are several:
- Proactively identify potential capital shortfalls.
- Free-up excess capital.
- Improve the alignment of internal IRR management processes with an institution’s risk profile.
- Estimate capital levels, leveraging an institution’s historical risk profile.