The Effective Yield Calculator (EYC ) Analytics is a methodology and software suite for analysing and differentiating the lender’s Mortgage Loan Portfolio into its various constituents, to facilitate measurement and tracking of its segmented income, costs and net profitability
Mortgage Portfolio Profitability
Why it is needed?
It is a truism to say that ‘one cannot manage what one cannot see (and measure)’. Accordingly, accurate calculation of net profitability is essential for many purposes:
Our Approach to Clients
Mortgage Portfolio Evaluation
Designed to be end-to-end, ECM covers all operational aspects
EYC Analytics is a methodology and software suite for analysing and differentiating the lender’s Mortgage Loan Portfolio into its various constituents, to facilitate measurement and tracking of its segmented income, costs and net profitability. This analysis is required under IFRS 9 for regulatory compliance. Equally importantly, it is required for overall effective management of the loan portfolio e.g. for the acceptance and accurate pricing of new business and for the prioritisation and management of mortgage arrears.
Synchronising mortgage costs with mortgage income recognition
EYC is an IFRS – compliant solution which distributes mortgage costs and provisions in line with mortgage income, for more accurate profitability measurement over the lifecycle of the portfolio.
This product was developed to differentiate and manage profitability in one bank’s very large mortgage loan portfolio.
EYC enables the bank to identify aspects of cross subsidization across the various standard sub-portfolios e.g.tracker versus other loans, fixed rate versus variable rates etc. and thereby to differentiate and improve cost and risk pricing within the bank’s overall mortgage portfolio.
EYC employs precise calculations of net income and adjusts for variations over time e.g. interest rates, redemption patterns, mortgage origination and other costs, new business levels and changes in the economy.
EYC provides flexibility to the lender to differentiate the profit performance of alternative mortgage types and loan maturities.
We would be delighted to undertake a complimentary consultation to show you our approach and identify where we can be of assistance to your organisation in reducing credit risk.