Lending in a Competitive Environment
Community bankers are a competitive lot. For many, the priority is getting the customer the best possible loan before another bank can do the same and take the customer. These bankers often view the loan’s interest rate and structure as the tools to win the business from their competitors: the lowest rate with the best terms wins the business. While this approach is understandable, given the competitive environment, it raises an important question. The lowest rate might win the business, but is that rate the best rate for the bank?
This paper discusses how institutions can use stronger pricing models that incorporate loan risk, borrower profitability and bank strategy to ensure that the customer always sees the bank’s best rate.
Download to learn:
- Pricing the potential loss of a loan
- Pricing the entire relationship of a borrower
- Implementing institution-wide pricing strategy
Download the Whitepaper