How to assess credit card portfolio performance

by Elan

Elan Credit Card recently presented a webinar to financial industry decision makers on how to navigate credit card issuing in an uncertain economic environment. Brian Bugg, CFA, VP, Director of Strategic Partnerships at Elan identified three key areas for financial institution leaders to focus on when assessing their portfolio performance and profitability: liquidity, credit risk, and operational expenses.

1. Liquidity

Liquidity, at its core, is the ability to match the cash flow (in and out) of your assets with your liabilities to be able to intermediate between your depositors and borrowers.

When thinking about liquidity, monitoring the duration (time related to interest rates) is paramount to your program’s success. For instance, the longer the duration of the loan, the more sensitive that current value is to shifts in interest rates.

 

 

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