Phoenix

PLANNING and MANAGEMENT CONTROL areas

The system is designed to receive the product /client information that is acquired on a monthly basis by the Management system. For this service area a MANAGEMENT CONTROL component is available for the assessment of the general contribution of client services and products and of the company treasury. The handling of "gross cash flows" involves the application of ITR (internal transfer rates) at "market rates" but also if necessary at "diversified ITR".
By way of example by applying the market rate model:

• the branches are affected by the figured component calculated by taking the Market ITR in the Original Currency of the operation (as a function of the repricing frequency and the drop away of the curve to which the operation is index linked) and the relative Financial Margin;
• while the Treasury is assigned the Mismatching margin which represents the actual interest rate risk presented by the operation.

The "service margin" components are acquired, when available, in a very elementary fashion, but there are also"standard" calculation functions available for the non-identifiable components.

The system makes the information available with a specific REPORTING component in which a large number of standard patterns are provided in various theme based folders. The reports can be scanned and filtered based on the different entities foreseen for each assessed magnitude. There is also a scheduling function which, when certain set conditions are reported, produces a report in the desired format, making it available for subsequent distribution stages.

All reports are expressed in values with "tax" and IAS (international accounting standard) connotations and the system also offers representations and reconciliation functions which make the values compatible with those of General Accounting.

There is also a component available for COSTING management which, through the use of feeding functions either from file or direct from the analytical bookkeeping system, enables COST components along with potential REVENUE components, to be assigned to cost and profit centres, with the management of assignments and charge backs handled according to fixed and dynamic criteria.

The tools available in this area also include the component for BUDGET. management. Designed to handle preliminary budget assessment functions, it enables growth definition and forecasts and TOP DOWN or BOTTOM UP logic variations based on margins, interest rates, volumes and commercial products. Management of the "bank treasury" sizing is also provided.

The area instrumentation is further completed by an information tool which by reconciling the Budget, Management and Supervision control information enables the formulation of the hypotheses and simulations needed by Supervision for assessments of foreseen capital absorption.

CREDIT RISK SUPERVISION area

For the supervision of the CREDIT RISK there is a broad range of information and assessments available that go hand in hand with a specific scoring model. By cross-referencing information on Internal Progress provided by the Risk and Budgeting Centre, the bank can effectively monitor the performance of risk positions connected to credit granted to its clientèle. The models and the indicators of each source, are subjected to a statistical assessment of effectiveness and predictive capacity. The monitoring component that carries out the analysis of the downward positions through distribution lists and transition matrices can be customised by diversifying both the segmentation, the use and the weighting of the available sources. It is also possible to integrate additional information which may be acquired automatically from outside suppliers (i.e. sector valuations).

The general integration of the outside sources managed via a specific component, is largely automated and capable of acquiring data flows and reports from the main infoproviders, but also from local operators already connected to the banks. The purpose of this integration is not limited to performance monitoring, but can also be used to support credit merit assessment needs for the granting or renewal of lines of credit. Inspections, appraisals and judgements and all other acquired information is made available to the PRELIMINARY LOAN ASSESSMENT PROCESS performed by the PEF (Electronic Loan Procedure), located in the information management system.

The credit risk supervision area also provides representations of the downward positions according to the breakdowns and models offered by Supervision (Objective watch-lists, Past Due).
Assessment tools for outstanding payment monitoring and the exercise of powers of attorney in a credit context, complete the set of available information.

The monitoring function can also be supported by using a component for the tracing of "comments" which can be exchanged between the various professional profiles and the decisions reached regarding the clientèle that has been placed under control.

Within this area, in a "portfolio assessment" perspective, one can also take advantage of the RISK / PERFORMANCE CORRELATION. This relationship can be monitored at the client level and then collectively assessed through various quantitative valuation options. In this context one can also take a look at comparison benchmarks, which can be selected in relation to the territorial context or to size parameters.

SUPERVISION area

The system provides a special section for risk assessment relative to the decisions reached by Supervision in complying with the Basel pillar II and III directives. Capital absorption assessment charts for the various risk categories, detected by matrix flows, are displayed and aligned with the greatest level of detail based on values, reports and clients. For the main risks reports are processed and monthly information reports are provided, compared to the usual report schedule.

COMMERCIAL area

The need for assessment and planning of bank development and growth activities is supported in a very distinctive fashion by a specific ANALYZER tool (see the SIB Operational Marketing point) for the combined assessment of client relations / product. A specific interface makes information readily available with the greatest amount of detail, enabling the identification of the "commercial segmentation" or more simply the identification of the most suitable client groups to whom the products and commercial packages might be offered. Even in this case the integration with the management system and consequently the "operational marketing" functions guarantee the maximum level of consistency between planning considerations and specific commercial actions.