Effective loan pricing: The impact of rising rates and inflation on profitability

Having a hard time discerning whether your lending team is originating both high quality and profitable loans?  Are you struggling with how to price loans in a rising-rate environment in order to stay competitive? It’s important to understand what loan products will resonate with your customers more than ever.

In this session, you will learn how to effectively manage your loan pricing components and how loan product features can widen your net interest margin. We will discuss risk-based loan pricing, blended loan-funding concepts, and loan profitability calculations. We will also review the best profitability benchmarks for your current capital position and loan-to-deposit ratio and how to avoid some common pitfalls in loan pricing decisions and assess overall customer profitability.

We will cover:

• The impact of inflation and rising rates on profitability
• Improving your net interest margin through loan product features
• How different loan pricing models are used and their major components
• The cost of funding loans in a rising rate environment
• Selecting the correct benchmark/target for loan pricing
• Leveraging relationship pricing and customer profitability