ALM Core
A powerful Asset and Liability management tool
ALM Balance
Creating the ALM balance sheet from the trial balance involves not only extracting and organizing financial data but also categorizing assets and liabilities based on their maturities, interest rate sensitivities, and liquidity profiles
Gaps
Measure and analyze mismatches between assets and liabilities across different time horizons. Assess the exposure to interest rate risk and liquidity risk and optimize strategie to mitigate potential imbalances.
Setting the parameters
Gain complete control by defining your own input parameters and customizing categorization methods to align with your unique business needs
Forecasting
Forecast future financial performance and identify potential risks before they materialize. Leveraging advanced prevision techniques provides a strategic edge in managing uncertainty and planning for sustainable growth.
Defining flow formulas
Determine the flow rule for each balance sheet item with precision, ensuring accurate classification and tracking of financial movements over time
Visualization
Transform complex financial data into intuitive, actionable insights and improve decision-making and strategic planning.
ALM Core
Data Flows
Pay off all assets and liabilities over the defined period.
Each balance sheet item is analyzed in detail and modeled either deterministically or non-deterministically, taking into account factors such as credit events.
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For the dynamic case, we also model “New Production” and “New Financing”.
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Liquidity risk
The mismatch between the bank's resources and uses over time can create a liquidity risk (loss) or a lack of financing strategy (surplus).
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In management terms, we seek to calculate “forecast impasses”, which are anticipated impasses for different future horizons, by determining the difference between assets and liabilities.
Therefore we determine liquidity gaps in stock and in flow.
Interest rate risk
A balance sheet asset or liability is considered interest-sensitive if its yield can change in response to a change in market rates, such as variable rates, variable-rate deposits, bonds, etc.
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Interest rate gaps measure the difference between assets and liabilities that are sensitive to changes in interest rates for different maturities.
Income statement
ALM Core integrates all the main income statement items required for balance sheet analysis.
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ALM core determines Net Present Value, sensitivities, duration, net interest margin (NIM), operating cost and net income.
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Gain future visibility on your institution's regulatory indicators (capital requirements, solvency ratio).
A bank's main activity is to take deposits and transform them into loans. These cash inflows and outflows expose the bank to risks, mainly interest rate and liquidity risks.
It is therefore imperative for the bank to anticipate these risks, to avoid incurring huge losses.
Static
It is a conventional approach designed to assess financial risks tied to a financial institution's balance sheet
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This method focuses on analyzing the existing state of assets and liabilities, disregarding any potential future changes or transactions, and operates under the assumption that the balance sheet structure remains unchanged throughout the analysis period.
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Dynamic
is an advanced approach that incorporates future projections and scenarios to analyze and manage financial risks.
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Unlike the Static Method, which focuses only on the current state of the balance sheet. In the dynamic case, we integrate new production, new financing and changes in customer behavior.
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