Loss Trends

The ability to visualize future trends in loss rates by risk rating provides management the opportunity to undertake proactive actions.

Unlike commercial loan charge-off rates and consumer sector delinquency rates which are lagging indicators of the final loss outcomes, PortfolioView analyzes the transition pattern of loan exposures between risk ratings through the entire portfolio, including both pass and criticized categories. The system is thus able to forecast developing losses several months in advance, well before these losses become evident to management or regulators.

This early warning can provide management opportunities to mitigate the potential deterioration in asset quality. An economic recovery, on the other hand, will signal early improvement in the portfolio that should facilitate the initiation of growth policies ahead of the competition.

The ability of the system to analyze any segment can assist decision makers to focus on potential growth opportunities that would not otherwise be apparent.