Deposit Analysis : Deposit Analysis

The MPS Deposit Analysis Service enables higher performance balance sheet management, without higher interest rate or liquidity risk, by providing quantitative answers to key deposit balances supplied and value questions.

MPS deposit analysis solutions provide the behavior and value information that financial managers need to know about their institution's deposits. MPS analyses quantify vital balance sheet inputs, such as repricing, core deposit average lives, present values and premiums, the supply sensitivities of deposits to changes in rates paid and interest rates, minimum liquidity needs, and much more.  To support new mandates for sensitivity testing, standard results are augmented to show impacts of shorter truncations (50% and 75% shorter).  Surge balances (aka hot money) are identified and recognized in the analyses.

With this MPS service, your institution is empowered to:

  • Attain a lower cost of funds and more interest expense stability by precisely understanding the balances supplied behaviors of deposits
  • Specify more disciplined repricing responses to interest rate changes
  • Accurately measure interest rate risk (IRR), with least loss in current performance
  • Precisely control liquidity positions by applying quantified deposit behavior data
  • Strongly communicate true franchise value to capital markets and other audiences

MPS offers a range of standard reports. We can also custom design solutions for most deposit behavior and value assessment needs. Contact MPS for a specific consultation.

MPS Comprehensive Deposit Analysis Report

This report is for institutions that want to fully understand and leverage deposit behavior and value relationships for higher performance. Based on report information, managers can make improved pricing and deposit supply decisions that reduce liquidity needs and control your cost of funds. Also, higher levels of current income can be produced, while maintaining IRR compliance, through better matching of assets to fully quantified core deposit average life, premium and duration information across multiple interest rate scenarios.

MPS Express Deposit Analysis Report

This report is for institutions that want to economically measure IRR in order to maintain current income performance without regulatory duress. The streamlined report provides core deposit liquidity information plus income and equity at risk IRR core deposit term and value inputs. It presents accurate and defensible information on core deposit balances supplied behaviors and repricing, plus average lives, durations, and premiums across multiple rate shock scenarios.

MPS Repricing/Runoff Analysis Report

This report is for institutions that want to obtain core deposit inputs for their ALM model.  Institution-specific, category level repricing and runoff (decay) is delivered in spreadsheet format with an executive summary.  Prior year actual runoff is formally back tested against forecasted values and the statistical analyses are updated annually as part of a three year commitment.

MPS Analog Deposit Analysis Report

In some cases, (for example, newly proposed deposit products or recently launched ones) data is not available to conduct statistical analyses of historic behaviors. Analog IRR inputs can be created from recent forecast information obtained from the MPS experience base. Repricing, term, and value related inputs are averages of recent client experiences (as captured in their statistical studies) for deposit categories having similar characteristics.