FEATURES

Interest Rate Risk, Liquidity Risk, Foreign Exchange rate Risk, Funding and Hedging Strategies

ALMAN is used to assess interest rate risk and liquidity risk associated with a business plan, and in particular the supporting funding and hedging strategy.

This is done in two ways:

The fact that ALMAN can model company-wide cash flow makes it an ideal tool for planning wholesale funding operations.

Capital Revaluation

ALMAN is not limited to analysis of net interest income. It does this comprehensively, but its focus encompasses projection of the complete income statement, cashflow statement and balance sheet. In particular, capital revaluation policies may be reflected as and where appropriate, using whatever approach required: mark-to-market and/or fixed-rate and/or historical cost.

Multi-Currency

ALMAN caters for a fully multi-currency environment, including the transfers of cash and mark-to-market of accruals at projected spot rates. Foreign currency risk can be measured, evaluated and managed from consolidated down to product level.

Matched Funds Transfer Pricing

ALMAN supports transfer rates as well as market rates on products, so that the interest rate margin can be broken down into asset margin, liability margin and mismatch margin, and allocated accordingly between treasury and other business units

IFRS 7 / Fair-Value

ALMAN supports fair-value reporting as required by IFRS 7.

Accounting Integrity

The balance sheet, income statement and cash flow are at all times maintained in a mutually consistent state according to generally accepted accounting principles.

Risk Management

ALMAN supplies all the classical tools required for managing interest rate risk, liquidity risk, foreign exchange risk and capital adequacy. These include Gap Analysis, Maturity Analysis, Liquid Asset Composition, Interest Sensitivity, and many other reports employed by the ALCO.

In addition to its comprehensive detailed planning facilities, ALMAN allows extremely rapid generation of what-if strategic scenarios. For example, what if total assets grow by 6 percent instead of 5 percent this year?

ALMAN provides capabilities to apply PROACTIVE ALM. ALMAN will allow you to test and evaluate new strategies and opportunities to be explored.

Variance Analysis

ALMAN provides the facility to save plans as official “budgets” and “revised budgets”, and to report on the variance of actuals from these as well as from new plans.

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Point-in-time analyses of the current and projected balance sheet. All the classic ALM techniques are available such as re-pricing gap, liquidity gap, duration, fair-value, liquidity ratios & liquid asset composition

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Stress testing of the projected income and cash flows, to assess their sensitivity to assumptions such as future interest rate scenarios and new business volumes. ALMAN supplies an extensive set of tools for rapid entry and editing of these assumptions, including facilities to import them from Microsoft Excel, editing at a consolidated level with automated spread to component accounts, and rate-shock analyses.

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