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RORAC - Return on Risk-Adjusted Capital

Measure RORAC accurately and effectively with SunGard.

In the aftermath of the recent financial crisis, banks have been under greater pressure to improve risk management for banking and maintain a clearer view of return on risk-adjusted capital (RORAC). Prior to the crisis, banks achieved growth by gaining new customers, extending market share and increasing lending activities. But in the years since the crisis, banks have had to work to develop growth from within. To do that, banks need a way to measure RORAC effectively, so they can better assess the performance of their existing assets. Regulatory changes are now requiring banks to know the true RORAC of each and every transaction. But even without regulatory pressure, banks trying to maintain and increase market share must know which areas of their business are performing well and providing the highest RORAC, in order to make decisions based on profitability. To get a better picture of their RORAC, banks need a robust information framework and clear and consistent analysis to help inform decision-making. For banks seeking an industry-leading solution for measuring RORAC, SunGard has the answer.

Learn more about RORAC and SunGard now.

SunGard’s Ambit Profitability delivers a complete picture of RORAC for banks.

SunGard’s Ambit Profitability enables banks to improve banking risk management by understanding where profits are being made or lost, while taking into account the RORAC of each activity. With Ambit Profitability, banks can assess the performance of products managers, business units, branches and customers, with detail that extends down to the level of individual accounts. SunGard’s solution delivers both analytical breadth and depth, carrying out all RORAC and performance calculations at the transaction level. Using Ambit Profitability to measure and manage RORAC assessment, banks can more easily identify and keep their more profitable customers, optimizing the products and pricing they offer to increase net margins, improve efficiency and, ultimate, to achieve higher RORAC levels.

The benefits of choosing Ambit Profitability to assess RORAC.

With SunGard’s Ambit Profitability, banks can:

• Identify the most profitable aspects of the business to help with margin planning, cost management and capital allocation.
• Achieve more accurate fund transfer pricing to work out the true cost of funds.
• Allocate overhead costs and indirect operating costs to different cost centers and profit centers.
• Budget for strategic goals and monitor progress toward those goals.
• Segment customers by RORAC measurements.
• Improve asset and liability management to determine optimal funding strategies and manage liquidity risk.

Learn more about SunGard’s products for monitoring RORAC, as well as products for earnings at risk and return on equity capital.

SunGard’s Ambit Risk & Performance Management solution provides banks with a suite of software to improve risk management for banking. An Ambit liquidity risk solution helps banks minimize the exposure to risk and the cost of liquidity risk. Ambit’s risk management solutions help banks to better manage risk-adjusted performance. Credit risk management solutions provide tools and intelligence for better lending decisions. Additional solutions help manage asset liquidity risk, provide tools for gauging return on equity capital, get an accurate view of return on risk capital (RORC), and help manage increasingly complex regulatory compliance standards.