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market rate pricing (IS-B-PA)

Profitability Analysis (IS-B-PA)

Financial mathematical procedure for valuating interest-dependent bank transactions. For determining source-related profit and loss contributions at transaction level, each single transaction is compared with a a similarly structured comparable alternative transaction on the money and capital market. In particular, it is possible in this way to calculate the partial contribution (obtained from the customer transaction area) to the gross contribution of the single transaction. As an alternative to using market rates, you can use the financing and refinancing rates entered in Treasury as a basis for comparison. SAP Banking supports this method (which in the anglo-american area is called Funds Transfer Pricing) as part of bank transaction costing.

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